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.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Land & Water Forum: Fourth Report On Water Management

The Land and Water Forum (LWF) today published its fourth report, outlining 60 new consensus recommendations for how New Zealand should improve its management of fresh water and calling on the Government to urgently adopt all of its recommendations from earlier reports. More>>



Welcome Home: Record High Migration Stokes 41-Year High Population Growth

New Zealand annual net migration hit a new high in October as more people arrived from than departed for Australia for the first time in more than 20 years. More>>


Citizens' Advice Bureau: Report Shows Desperate Housing Situation Throughout NZ

CAB's in-depth analysis of over 2000 client enquiries about emergency accommodation shows vulnerable families, pregnant women and children living in cars and garages, even after seeking assistance from the Ministry of Social Development and Housing New Zealand. More>>


Speaking For The Bees: Greens Call For Neonicotinoid Pesticide Ban

The National Government should ban the use of controversial pesticides called neonicotinoids after evidence has revealed that even at low doses they cause harm to bee populations, the Green Party said today. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news