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

 


NZ dollar holds gains as Aust capex beats expectations

NZ dollar holds gains as Aust capex beats expectations, Fonterra buoys sentiment

By Paul McBeth

Aug. 28 (BusinessDesk) - The New Zealand dollar held gains today after Australian capital expenditure figures beat expectations, adding to optimism about the local economy after Fonterra Cooperative Group affirmed its forecast payout to farmers and signed up to a deal to distribute its products into China.

The kiwi rose to 83.91 US cents at 5pm in Wellington from 83.75 cents at 8am and 83.67 cents yesterday. The trade-weighted index was 79.06 from 79 yesterday.

Australian capital expenditure rose 1.1 percent in the second quarter, beating expectations for a 0.5 percent contraction, and first-quarter figures were revised up. That stoked demand for the Australian dollar, which dragged its New Zealand counterpart higher. The kiwi fell to 89.05 Australian cents from 89.77 cents after the capital expenditure figures.

"We had private capex out of Australia - the last couple were really quite weak, but this one was better than expected," said Michael Johnston, senior trader at HiFX in Auckland. "Short-term the kiwi could push up higher, but it's still a sell on rallies" over the medium-term, he said.

The kiwi was already supported by Fonterra's announcement yesterday affirming its forecast payout to farmers for the 2015 season, and announcing a joint venture with China's Beingmate to sell infant formula into the world's most populous nation. Westland Milk, a smaller rival to Fonterra, today cut its forecast payout for the 2015 seasons, citing falling global dairy prices and the strong kiwi dollar.

HiFX's Johnston said month-end positioning would also help support the Australian and New Zealand currencies as major fund managers tilted their portfolios.

Traders will be looking at US housing, employment and GDP data in coming days to gauge the strength of the world's biggest economy. A recent string of upbeat US data has underpinned growing expectations the Federal Reserve will start raising interest rates earlier and faster than anticipated.

The local currency was little changed at 87.04 yen at 5pm in Wellington from 87.02 yen yesterday, and edged down to 63.52 euro cents from 63.57 cents. It was unchanged at 50.55 British pence.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half Full: Dairy Payouts Steady, Cash Will Be Tight

Industry body DairyNZ is advising farmers to focus on strong cashflow management as they look ahead to the 2015-16 season following Fonterra's half-year results announcement today. More>>

ALSO:

First Union: Cotton On Plans To Use “Tea Break” Law

“The Prime Minister reassured New Zealanders that ‘post the passing of this law, will you all of a sudden find thousands of workers who are denied having a tea break? The answer is absolutely not’... Cotton On is proposing to remove tea and meal breaks for workers in its safety sensitive distribution centre. How long before other major chains try and follow suit?” More>>

ALSO:

Scoop Business: NZ-Korea FTA Signed Amid Spying, Lost Sovereignty Claims

A long-awaited free trade agreement between New Zealand and South Korea has been signed in Seoul by Prime Minister John Key and the Korean president, Park Geun-hye. More>>

ALSO:

PM Visit: NZ And Viet Nam Agree Ambitious Trade Target

New Zealand and Viet Nam have agreed an ambitious target of doubling two-way goods and service trade to around $2.2 billion by 2020, Prime Minister John Key has announced. More>>

ALSO:

Scoop Business: NZ Economy Grows 0.8% In Fourth Quarter

The New Zealand economy expanded in the fourth quarter as tourists drove growth in retailing and accommodation, and property sales increased demand for real estate services. More>>

ALSO:

Scoop Business: RBNZ’s Wheeler Keeps OCR On Hold, No Rate Hikes Ahead

The Reserve Bank has removed the prospect of future interest rate hikes from its forecast horizon as a strong kiwi dollar and cheap oil hold down inflation, and the central bank ponders whether to lower its assessment of where “neutral” interest rates should be. The kiwi dollar gained. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news