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

 


NZ dollar little changed after business confidence dips

NZ dollar little changed after business confidence dips

By Suze Metherell

July 8 (BusinessDesk) - The New Zealand dollar was little changed in local trading after business confidence dipped from a 20-year high, while remaining relatively upbeat.

The kiwi traded at 87.63 US cents at 5pm in Wellington, from 87.58 cents at 8am and was up from 87.19 cents yesterday. The trade-weighted index rose to 81.51 from 81.21 yesterday.

The New Zealand Institute of Economic Research’s Quarterly Survey of Business Opinion showed a net 33 percent of businesses were optimistic in the June quarter, seasonally adjusted, from a net 51 percent in the first quarter, prompting a short-lived dip in the kiwi dollar. The survey comes as the Reserve Bank is expected to raise the benchmark interest rate this month, following three increases this year.

"The kiwi continues to defy gravity against the US dollar but we had a blip on the radar on the downside after the business opinion survey," said Stuart Ive, senior trader at OMF. "We saw about a 20 point drop after the release of that data coming in weaker but the key underlying thing when you read through the report, it ends up on the bottom line saying with inflation expectations pinned at 2.5 percent in the medium term it's unlikely to detract the RBNZ from its hiking policy."

Looking ahead, traders are waiting for minutes from the US Federal Reserve's June meeting on Wednesday in Washington, as some analysts speculate that last week's employment data will push chair Janet Yellen to begin hiking interest rates sooner than expected. New Zealand is the first developed central bank to embark on a tightening cycle, after holding the official cash rate at a record low 2.5 percent since March 2011, a move similar to most of the world’s major central banks seeking to stimulate economic growth after the global financial crisis froze credit markets. The relatively high yield has put upward pressure on the local currency.

"We continue to wait to see the US yields increase but again the markets are still undecided as to when the Federal Reserve are going to change their policies," Ive said. "It's a long way off at the end of the day, and New Zealand is still hiking rates and that is really all the market can focus on at this moment in time."

The kiwi rose to 93.36 Australian cents from 93.14 cents at 5pm in Wellington yesterday. New Zealand's closest neighbour and second biggest trading partner releases employment data on Thursday. Australian unemployment rate has been static at 5.8 percent since March, but if data shows significant improvement it is likely to dampen demand for the kiwi and put downwards pressure on the TWI owing to the weight of the cross rate in the index, Ive said.

The local currency rose to 89.21 yen from 89.01 yen yesterday, and advanced to 51.16 British pence from 50.85 pence. The New Zealand dollar climbed to 64.41 euro cents from 64.17 cents yesterday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half Empty: Fonterra's 2017 Opening Forecast Below Expectations

Fonterra Cooperative Group raised its forecast farmgate milk payout for next season by less than expected as the world's largest dairy exporter predicts lower prices will crimp production and supply will pick up. The New Zealand dollar fell. More>>

ALSO:

Pest Control: Mouse Blitz Team Leaves For Antipodes

The Million Dollar Mouse project to rid Antipodes Island of mice is underway with the departure of a rodent eradication team to the remote nature reserve and World Heritage Area. More>>

Gongs Got: Canon Media Awards & NZ Radio Awards Happen

Radio NZ: RNZ website The Wireless, which is co-funded by NZ On Air, was named best website, while Toby Manhire and Toby Morris won the best opinion general writing section for their weekly column on rnz.co.nz and Tess McClure won the best junior feature writer section. More>>

ALSO:

Pre-Budget: Debt Focus Risks Losing Opportunity To Stoke Economy

The Treasury is likely to upgrade its forecasts for economic growth in Budget 2016 next week but Finance Minister Bill English has already signalled that more of his focus is on debt repayment than on fiscal stimulus or tax cuts... More>>

ALSO:

Fulton Hogan's Heroes: Managing Director Nick Miller Resigns

Fulton Hogan managing director Nick Miller will leave the privately owned construction company after seven years in charge. The Dunedin-based company has kicked off a search for a replacement, and Miller will stay on at the helm until March next year, or until a successor has been appointed and a transition period completed. More>>

ALSO:

Gordon Campbell: On Electricity, Executions, And Bob Dylan

The Electricity Authority has unveiled the final version of its pricing plan for electricity transmission. This will change the way transmission prices (which comprise about 10% of the average power bill) are computed, and will add hundreds of dollars a year to power bills for many ordinary consumers. More>>

ALSO:

Half Empty: Fonterra NZ, Australia Milk Collection Drops In Season

Fonterra Cooperative Group says milk collection is down in New Zealand and Australia, its two largest markets, in the first 11 months of the season during a period of weak dairy prices. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news