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

 

NZ dollar rises as terms of trade hold at 40-year high

NZ dollar rises as terms of trade hold at 40-year high

By Paul McBeth

Sept. 1 (BusinessDesk) - The New Zealand dollar edged up after government figures showed the nation's terms of trade stayed at a 40-year high in the second quarter as a stronger currency provided cheaper imports and offset the impact of falling commodity prices.

The kiwi rose to 83.73 US cents at 5pm in Wellington from 83.58 cents at 8am and 83.59 cents on Friday in New York. The trade-weighted index increased to 79.09 from 78.96 last week.

New Zealand's terms of trade, which measures the quantity of imports the country can buy with a set amount of exports, rose 0.3 percent in the three months ended June 30, beating expectations for a 2.3 percent fall. New Zealand's currency has come under pressure in recent months as falling dairy prices, the nation's biggest export, weighed on the outlook for economic growth.

"The terms of trade were certainly better than expected, and enough to give the kiwi a little bit of a nudge," said Stuart Ive, senior dealer foreign exchange at OMF in Wellington. "Any rallies in the kiwi against the US dollar for the time being appear to be somewhat limited to the upside."

The strong local data came against a backdrop of dwindling risk appetite in the global market as tensions mount between Russia and western nations over the sovereignty of Ukraine. Russian president Vladimir Putin yesterday criticised European leaders for supporting Ukraine and said talks on the conflict should include the issue of ‘statehood’ in eastern Ukraine, suggesting he is unlikely to back down.

The kiwi increased to 63.78 euro cents from 63.63 cents on Friday in New York.

Chinese manufacturing figures today missed expectations, with the official purchasing managers' index at 51.1 in August, and the HSBC flash PMI at 50.2. China is New Zealand and Australia's biggest trading partner. The kiwi rose to 89.61 Australian cents from 89.47 cents on Friday, and ahead of tomorrow's Reserve Bank of Australia policy review, which is expected to keep the target cash rate at 2.5 percent.

The local currency gained to 87.23 yen at 5pm in Wellington from 86.98 yen last week, and traded at 50.44 British pence from 50.36 pence.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Retail: International Websites To Pay GST

New rules would be aimed at imported goods valued at or below $1,000. Customs would retain responsibility for collecting GST on imported parcels valued more than $1,000. More>>

ALSO:

High-Level Advice: PM’s Business Advisory Council Membership Announced

The Prime Minister’s Business Advisory Council brings together a mix of experts, six women and seven men with small to large business experience, from across New Zealand, to provide advice. More>>

ALSO:

Improving: Report Shows New Zealand Air Quality 'Good'

Our air 2018, produced by the Ministry for the Environment and Stats NZ, shows that while some previously known issues persist, progress has been made and levels of some pollutants are declining. More>>

ALSO:

Greenpeace: Govt Extends OMV Exploration Permit

The Government has just granted oil giant OMV a two-year extension to drill in the Great South Basin, despite issuing a ban on new oil and gas exploration permits in April. More>>

ALSO:

Collective Bargaining For Contractors: Working Group's Model For Screen Sector

A recommended model to allow collective bargaining for contractors in the screen sector has today been unveiled by the Government-convened Film Industry Working Group. More>>

ALSO:

Kauri Dieback: DOC Closing Tracks To Protect Trees

The Department of Conservation will close 21 tracks across kauri land to help prevent the spread of kauri dieback. An additional 10 tracks will also be partially closed and the open sections upgraded... More>>