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

 


NZ dollar gains after Griffin's deal; rate review looms

NZ dollar gains as Griffin's deal announced, OCR review awaited

By Jonathan Underhill

July 21 (BusinessDesk) - The New Zealand dollar rose as the $700 million sale of Griffin's Foods to a Philippines-based company stoked expectations of demand for the kiwi and as traders pondered the likely language the Reserve Bank will use if it hikes interest rates as expected on Thursday.

The local currency rose to 87.12 US cents at 5pm in Wellington from 86.85 cents at the start of the day and from 86.97 cents at the New York close on Friday. The trade-weighted index rose to 81.05 from 80.84 on Friday.

Australian private equity firm Pacific Equity Partners today said it will sell snack-food company Griffin's to Universal Robina Corp of the Philippines subject to regulatory approvals. The currency also got a lift after traders who had bet on a decline in risk appetite at the end of last week following the shooting down of a Malaysian passenger plane had to buy back their positions when reaction was smaller than expected. The market is now awaiting the Reserve Bank's one-page statement on Thursday, which is expected to see a quarter point hike in the official cash rate to 3.5 percent and then potentially a pause in the tightening cycle.

"News of the PEP deal leaking into the market could've had some impact on the kiwi. Most of that $700 million will be kiwi dollars," said Michael Johnson, senior trader at HiFX. "There's been a bit of short covering ahead of the RBNZ. A lot of the market would have gone home short going into the weekend with the Malaysian airline disaster, thinking it would ratchet up over the weekend. It did but not to the degree expected."

"The kiwi is still very high and longer term it is going to go down," he said. "Short term it depends what the Reserve Bank does on Thursday."

On balance, the New Zealand dollar may fall this week, based on a BusinessDesk survey of 10 traders and strategists published today. Five see a decline, four predict a gain and one sees the kiwi little changed. The range may be 85 US cents and 88.50 cents. The Reserve Bank will be a key event, with many market participants unwilling to bet on the pace of rate hikes after this week even though this week's move is priced into the currency.

The kiwi didn't move much after government figures showed the country gained a net 38,300 migrants in the year through June, the highest since October 2003 and just above the peak for the year seen by the Treasury and Reserve Bank.

The New Zealand dollar rose to 92.74 Australian cents from 92.67 cents on Friday and traded at 64.33 euro cents from 64.15 cents. It rose to 50.94 British pence from 50.72 pence and gained to 88.16 yen from 87.92 yen on Friday. Japanese banks are closed today in observance of Marine Day.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Company Results: Air NZ Rides The Tourism Boom With Record Full-Year Earnings

Air New Zealand has ridden the tourism boom and staved off increased competition to deliver the best full-year earnings in its 76-year history. More>>

ALSO:

New PGP: Sheep Milk Industry Gets $12.6M Crown Funding

The Sheep - Horizon Three programme aims to develop "a market driven, end-to-end value chain generating annual revenues of between $200 million and $700 million by 2030," according to a joint statement. More>>

ALSO:

Half Full: Fonterra Raises Forecast Milk Price

Fonterra Co-operative Group Limited today increased its 2016/17 forecast Farmgate Milk Price by 50 cents to $4.75 per kgMS. When combined with the forecast earnings per share range for the 2017 financial year of 50 to 60 cents, the total payout available to farmers in the current season is forecast to be $5.25 to $5.35 before retentions. More>>

ALSO:

Keep Digging: Seabed Ironsands Miner TransTasman Tries Again

The first company to attempt to gain a resource consent to mine ironsands from the ocean floor in New Zealand's Exclusive Economic Zone has lodged a new application containing fresh scientific and other evidence it hopes will persuade regulators after their initial application was turned down in 2014. More>>

Wool Pulled: Duvets Sold As ‘Premium Alpaca’ Mostly Sheep’s Wool

Rotorua business Budge Collection Limited (Budge) and sole director, Sun Dong Kim, were convicted and fined a total of $71,250 in Auckland District Court after each pleading guilty to four charges of misrepresenting how much alpaca fibre was in their duvets. More>>

Reserve Bank: Labour Calls For Monetary Policy To Expand Goals

Labour's comments follow a speech today by RBNZ governor Graeme Wheeler in which Wheeler sought to answer critics who variously say he should stop lowering interest rates, lower them faster, or that inflation-targeting should no longer be the primary goal of the central bank's activities. More>>

ALSO:

BSA Extension And Sunday Morning Ads: Digital Convergence Bill Captures Online Content

Broadcasting Minister Amy Adams has today announced the Government’s plans to update the Broadcasting Act to better reflect today’s converged market... The Government considered four areas as part of its review into content regulation: classification requirements, advertising restrictions, election programming and contestable funding. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news