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


NZ dollar little changed, eschews risk aversion

NZ dollar little changed as yield advantage offsets risk aversion

By Paul McBeth

Aug. 11 (BusinessDesk) - The New Zealand dollar was little changed as the currency's relatively attractive yield helped underpin the currency in the face of heightened risk aversion among investors.

The kiwi traded at 84.67 US cents at 5pm in Wellington from 84.60 cents at 8am, and 84.56 cents on Friday in New York. The trade-weighted index edged up to 79.39 from 79.27 last week.

New Zealand's currency has been a favourite among investors this year after a series of interest rate increases boosted its yield advantage over its peers. The yield on 10-year New Zealand government bonds was recently at 4.25 percent, compared to 2.44 percent on 10-year US Treasuries or 1.05 percent on European government bonds. That advantage has limited the kiwi's 3.9 percent decline over the past month as falling commodity prices and heightened geopolitical tensions sap investors' appetite for risk-sensitive assets.

"The kiwi seems to be somewhat immune to risk aversion," said Sam Tuck, senior FX strategist at ANZ Bank New Zealand in Auckland. "It points to the long-term yield advantage of New Zealand."

ANZ's Tuck said he expects the kiwi will eventually grind lower as the US economic recovery gathers pace, and stokes demand for the greenback.

New Zealand government figures today showed retail spending on electronic cards rose in July after a survey last month showed increased consumer confidence.

A BusinessDesk survey of eight traders and strategists predicts the kiwi will probably trade between 83 US cents and 86 cents this week. Four expect the kiwi will remain largely unchanged this week, while three said it may gain and one is picking a drop.

The local currency gained to 86.48 yen at 5pm in Wellington from 86.29 yen on Friday in New York, and increased to 91.22 Australian cents form 91.12 cents. It edged up to 63.18 euro cents from 63.05 cents last week, and was little changed at 50.44 British pence from 50.41 pence.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Postnatal Depression: 'The Thief That Steals Motherhood' - Alison McCulloch

Post-natal depression is a sly and cruel illness, described by one expert as ‘the thief that steals motherhood’, it creeps up on its victims, hiding behind the stress and exhaustion of being a new parent, catching many women unaware and unprepared. More>>


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