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

 


NZ dollar extends drop vs. A$ after Australian CPI

NZ dollar extends drop vs. A$ after Australian inflation accelerates; RBNZ looms

By Paul McBeth

July 23 (BusinessDesk) - The New Zealand dollar extended its decline against its trans-Tasman counterpart after Australian government figures showed annual inflation accelerated to its fastest pace in four years, and ahead of the Reserve Bank of New Zealand's interest rate review tomorrow.

The kiwi fell to 91.97 Australian cents at 5pm in Wellington from 92.27 cents immediately before the report, and 92.36 cents yesterday. The local currency traded at 86.78 US cents at 5pm from 86.67 cents at 8am and 86.74 cents yesterday.

Australia's annual trimmed mean inflation rate increased to 2.9 percent in the June quarter, according to the Bureau of Statistics, and ahead of the 2.7 percent pace expected. The faster pace of consumer price increases reduces the likelihood of another rate cut by the Reserve Bank of Australia, and may diminish the yield advantage New Zealand has over its neighbouring nation.

"Aussie CPI was much stronger than expected," said Imre Speizer, market strategist at Westpac Banking Corp in Auckland. "We possibly may have seen the multi-year highs in that kiwi/Aussie cross."

The data comes ahead of tomorrow's monetary policy review by New Zealand's central bank. Governor Graeme Wheeler is expected to hike the official cash rate a quarter-point to 3.5 percent, the fourth increase since he embarked on tightening policy earlier this year in a bid to clamp down on inflationary pressures.

Westpac's Speizer said Wheeler will probably signal a pause in the tightening cycle at tomorrow's meeting, which might prompt some movement in the kiwi dollar, although "a lot of that is already priced in."

Finance Minister Bill English reiterated his view the kiwi is "unsustainably high" telling BusinessDesk on the sidelines of a Trans-Tasman Business Circle lunch in Wellington that "almost anyone who has looked at it comes to the conclusion it's somewhere 10 to 15 percent overvalued."

The trade-weighted index was little changed at 80.81 from 80.77 yesterday. The local currency gained to 64.45 euro cents at 5pm in Wellington from 64.13 cents yesterday, and traded at 50.82 British pence from 50.78 pence. It was little changed at 87.99 yen from 88.01 yen yesterday.

(BusinessDesk)

© 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
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news