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.


© Scoop Media

Business Headlines | Sci-Tech Headlines


DIY: Kiwi Ingenuity And Masking Tape Saves Chick

Kiwi ingenuity and masking tape has saved a Kiwi chick after its egg was badly damaged endangering the chick's life. The egg was delivered to Kiwi Encounter at Rainbow Springs in Rotorua 14 days ago by a DOC worker with a large hole in its shell and against all odds has just successfully hatched. More>>


Trade: Key To Lead Mission To India; ASEAN FTA Review Announced

Prime Minister John Key will lead a trade delegation to India next week, saying the pursuit of a free trade agreement with the protectionist giant is "the primary reason we're going" but playing down the likelihood of early progress. More>>



MYOB: Digital Signatures Go Live

From today, Inland Revenue will begin accepting “digital signatures”, saving businesses and their accountants a huge amount of administration time and further reducing the need for pen and paper in the workplace. More>>

Oil Searches: Norway's Statoil Quits Reinga Basin

Statoil, the Norwegian state-owned oil company, has given up oil and gas exploration in Northland's Reinga Basin, saying the probably of a find was 'too low'. More>>


Modern Living: Auckland Development Blowouts Reminiscent Of Run Up To GFC

The collapse of property developments in Auckland is "almost groundhog day" to the run-up of the global financial crisis in 2007/2008 as banks refuse to fund projects due to blowouts in construction and labour costs, says John Kensington, the author of KPMG's Financial Institutions Performance Survey. More>>


Health: New Zealand's First ‘No Sugary Drinks’ Logo Unveiled

New Zealand’s first “no sugary drinks logo” has been unveiled at an event in Wellington... It will empower communities around New Zealand to lift their health and wellbeing and send a clear message about the damage caused by too much sugar in our diets. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news