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

 

Media: Julian Wilcox Leaves Māori TV

Māori Television has confirmed the resignation of Head of News and Production Julian Wilcox. Mr Maxwell acknowledged Mr Wilcox’s significant contribution to Māori Television since joining the organisation in 2004. More>>

ALSO:

Genetics: New Heat Tolerant Cow Developed

Hamilton, New Zealand-based Dairy Solutionz Ltd has led an expert genetics team to develop a new dairy cow breed conditioned to thrive in lower elevation tropical climates and achieve high milk production under heat stress. More>>

Fractals: Thousands More Business Cards Needed To Build Giant Sponge

New Zealand is taking part in a global event this weekend to build a Menger Sponge using 15 million business cards but local organisers say they are thousands of business cards short. More>>

Scoop Business: NZ Net Migration Rises To Annual Record In September

New Zealand’s annual net migration rose to a record in September, beating government forecasts, as the inflow was spurred by student arrivals from India and Kiwis returning home from Australia. More>>

ALSO:

Scoop Business: Fletcher To Close Its Christchurch Insulation Plant, Cut 29 Jobs

Fletcher Building, New Zealand’s largest listed company, will close its Christchurch insulation factory, as it consolidates its Tasman Insulations operations in a “highly competitive market”. More>>

ALSO:

Scoop Business: Novartis Adds Nine New Treatments Under Pharmac Deal

Novartis New Zealand, the local unit of the global pharmaceuticals firm, has added nine new treatments in a far-ranging agreement with government drug buying agency, Pharmac. More>>

ALSO:

Crown Accounts: English Wary On Tax Take, Could Threaten Surplus

Finance Minister Bill English is warning the tax take may come in below forecast in the current financial year, as figures released today confirm it was short by nearly $1 billion in the year to June 30 and English warned of the potential impact of slumping receipts from agricultural exports. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

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