Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


NZ dollar jumps vs. A$ on increased prospect of RBA rate cut

NZ dollar jumps to three-month high vs. Aussie as chance of RBA rate cut increases

By Tina Morrison

July 4 (BusinessDesk) - The New Zealand dollar surged to a three-month high against its Australian counterpart, hovering just under 94 Australian cents, as expectations rise that the Australian central bank may reduce interest rates.

The kiwi touched 93.95 Australian cents overnight, its highest since March 27, and was trading at 93.56 cents at 8am in Wellington, from 93.45 cents at 5pm yesterday. The local currency slipped to 87.51 US cents from 87.67 cents yesterday after a report showed the US added 288,000 jobs last month, beating expectations for an additional 215,000 jobs and boosting optimism about a revival in the world's largest economy.

The Australian dollar declined after weaker than expected retail sales data and following dovish comments by Reserve Bank of Australia governor Glenn Stevens who said yesterday the Aussie was overvalued "and not by just a few cents" and that investors were underestimating the probability of a "significant fall" in the currency at some point. Stevens said the RBA "still has ammunition on interest rates", prompting traders to increase their expectations for a 25 basis point cut in interest rates to 60 percent from around 30 percent previously, according to Bank of New Zealand.

"He was stronger in talking down the currency and he also hinted that they wouldn't rule out interest rate cuts," said Imre Speizer, Westpac Banking Corp senior market strategist. "Those two things are clearly going to push down the Aussie so therefore kiwi/Aussie has to rise. It looks like it could go further still."

Speizer said the kiwi/Aussie cross rate may reach 94 cents but might struggle beyond that level.

Today, the Reserve Bank of Australia's head of financial stability, Luci Ellis, is scheduled to speak to the 2014 Economic and Social Outlook Conference in Melbourne.

US Markets are closed for Independence Day.

The New Zealand dollar advanced to 64.31 euro cents from 64.21 cents yesterday after European Central Bank president Mario Draghi affirmed the bank's low interest rate policy.

The kiwi edged lower to 51.02 British pence from 51.08 pence yesterday and advanced to 89.41 yen from 89.28 yen. The trade-weighted index was little changed at 81.49 from 81.47 yesterday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Must Sell 20 Petrol Stations: Z Cleared To Buy Caltex Assets

Z Energy is allowed to buy the Caltex and Challenge! petrol station chains but must sell 19 of its retail sites and one truck-stop, the Commerce Commission has ruled in a split decision that acknowledges possible retail price coordination between fuel retailers occurs in some regions. More>>

ALSO:

Huntly: Genesis Extends Life Of Coal-Fuelled Power Station To 2022

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022, having previously said they'd be closed by 2018, after wringing a high price from other electricity generators who wanted to keep them as back-up. More>>

ALSO:

Dammed If You Do: Ruataniwha Irrigation Scheme Hits Farmer Uptake Targets

Enough Hawke's Bay farmers have signed up for water from the proposed Ruataniwha Water Storage Scheme for it to go ahead as long as a cornerstone institutional capital investor can be found to back it, its regional council promoter announced. More>>

ALSO:

Reserve Bank: OCR Stays At 2.25%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2.25 percent, in a decision traders had said could go either way, while predicting inflation will pick up as the slump in oil prices washes out of the data and capacity pressures start to build in the economy. More>>

ALSO:

Export Values Down: NZ Posts Biggest Annual Trade Deficit In 7 Years

New Zealand has recorded its biggest annual trade deficit since April 2009, reflecting weaker prices of agricultural commodities such as dairy products, beef and lamb, and increased imports of vehicles and machinery. More>>

ALSO:

Currency Events: NZ's New $5 Note Wins International Banknote Award

New Zealand’s new Brighter Money $5 note has been named Banknote of the Year in a prestigious international competition. The $5 note was awarded the IBNS Banknote of the Year title at the International Bank Note Society’s annual meeting. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news