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

 


NZ dollar heads for 0.8% weekly gain, tests post-float high

NZ dollar heads for 0.8% weekly gain, testing post-float high

By Paul McBeth

July 11 (BusinessDesk) - The New Zealand dollar is heading for a 0.8 percent gain against the greenback this week, having tested a post-float high 88.40 US cents, as the prospect of lower interest rates in the US stokes demand for higher-yielding assets.

The kiwi rose to 88.08 US cents at 5pm in Wellington from 87.38 cents on Friday in New York last week, and was little changed from 88.21 cents at 8am and 88.20 cents yesterday. The trade-weighted index was 81.85 at 5pm in Wellington from 81.91 yesterday, and is heading for a 0.7 percent weekly gain from 81.30 last Friday.

A BusinessDesk survey of 10 traders and strategists on Monday predicted the kiwi would trade between 86.40 US cents and 88.50 cents this week. Six predicted the kiwi would fall this week, while two expected it to gain and two said it would likely remain largely unchanged.

The local currency benefited from renewed investor appetite for riskier assets after minutes to the Federal Reserve's June policy meeting prompted speculation the central bank will keep interest rates near zero for longer than previously anticipated. New Zealand's interest rate track is on the way up, with the Reserve Bank already hiking the benchmark rate three times this year, and at 4.45 percent, the yield on New Zealand 10-year government bonds is 192 basis points higher than their US equivalent.

"High yielding currencies are what investors want, and being the highest of all the kiwi is the biggest one to gain," said Alex Hill, head of dealing at HiFX in Auckland. "We're just south of an all-time high and could look to be threatening that next week."

Government figures today showed food prices rose at an annual pace of 1.2 percent in June. The series accounts for almost a fifth of the consumers price index, and economists anticipate a 0.5 percent rise in second-quarter CPI. Traders will be watching New Zealand's second-quarter inflation figures next week to see whether the pace of rising prices will prompt the Reserve Bank to stick to its expected track for interest rate increases. Investors are pricing in 84 basis points of increases to the 3.25 percent official cash rate over the coming 12 months, according to the Overnight Index Swap curve.

The local currency traded at 64.75 euro cents at 5pm in Wellington from 64.64 cents yesterday as concerns that missed payments by one of Portugal's biggest banks may spread to other lenders in the region. The kiwi was little changed at 51.43 British pence from 51.42 pence yesterday.

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Scoop Business: Productivity Commission To Look At Housing Land Supply

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth. More>>

ALSO:

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news