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

 


NZ dollar TWI at post-float record on upbeat Fitch outlook

NZ dollar TWI at post-float record on upbeat Fitch outlook

By Suze Metherell

July 9 (BusinessDesk) - The New Zealand dollar rose to a post-float high on a trade weighted basis after a more upbeat outlook from credit rating agency Fitch Ratings attracted investors seeking bigger returns.

The trade-weighted index climbed to 81.72 at 5pm in Wellington from 81.51 yesterday. The local currency was trading at 87.93 US cents, from 87.83 cents at 8am this morning and up from 87.63 cents at 5pm yesterday.

The kiwi rose to a three year-high against the greenback overnight after Fitch affirmed the New Zealand's AA rating and upgraded the outlook to positive from stable. The currency is now in reach of breaching the post-float record of 88.40 US cents as New Zealand’s rising interest rates cause a resurgence in the carry trade, where investors borrow cheaply in their home currency to invest in higher yielding currencies such as the kiwi dollar.

"Fitch was the catalyst for that particular jump higher but overnight there was a general uptrend for both Aussie and kiwi and a whole bunch of emerging market currencies - the big theme at play still is one where the carry trade reigns supreme," said Raiko Shareef, a currency strategist at Bank of New Zealand. "It peaked its head above 88 cents - it's still a struggle for the kiwi to break that level in any significant fashion, it keeps on testing it."

The Federal Reserve will release minutes for its June meeting on Wednesday in Washington. Traders will be looking for any insight into the central bank's view on the world's largest economy, particularly around the state of employment and whether data shows enough pick up in the US job market, said Shareef. Some investors are speculating the stronger employment data will prompt the Fed to hike interest rates sooner than expected.

The New Zealand dollar rose to 93.57 Australian cents from 93.35 yesterday. Traders will be watching tomorrow's employment figures across the Tasman, where unemployment has been static at 5.8 percent for the past three months. Any significant changes is likely to weigh on the TWI owing to the Australian dollar's weight in the index.

The kiwi increased to 64.56 euro cents from 64.41 cents yesterday, gained to 51.32 British pence from 51.16 pence and was little changed at 89.34 yen from 89.21 yen yesterday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Gareth Morgan: The Government’s Fresh Water Policy – Revisited

Fresh water quality is the latest area to be in the sights of Gareth Morgan and his research organisation The Morgan Foundation... They found that the fresh water policy was a bit murkier than the Environment Minister let on. More>>

ALSO:

Interest Rates: RBNZ Hikes OCR To 3.5%, ‘Period Of Assessment’ Now Needed

Reserve Bank governor Graeme Wheeler raised the official cash rate as expected, while signalling a pause in rate hikes to assess the impact of moves so far this year. The kiwi dollar sank after Wheeler said its strength was “unjustified” and that the currency could have “a significant fall.” More>>

ALSO:

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Warming: Warming Signs From State Of Climate Report

Climate data from air, land, sea and ice in 2013 'reflect trends of a warming planet' -- says the latest State of the Climate report, launched by U.S. and New Zealand scientists. More>>

ALSO:

Scoop Business: Embrace Falling Home Affordability, Says NZIER

Despair over the inability to afford a house is misplaced and should be embraced as an opportunity to invest in more wealth-creating activity, says the principal economist at the New Zealand Institute of Economic Research, Shamubeel Eaqub. More>>

Productivity Commission: NZ Regulation Not Keeping Pace

New Zealand regulators often have to work with out-of-date legislation, quality checks are under strain, and regulatory workers need better training and development. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news