Scoop has an Ethical Paywall
Work smarter with a Pro licence Learn More

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

 

NZ dollar could stay above Aussie dollar parity: UBS

NZ dollar could stay above Aussie dollar parity for 'at least a year', UBS says

By Tina Morrison

April 17 (BusinessDesk) - The New Zealand dollar could achieve parity with the Australian dollar within weeks and stay above A$1 for at least a year, according to revised forecasts by economists for the New Zealand arm of the global financial services company, UBS.

The kiwi last week touched 99.78 Australian cents, its highest level since being allowed to trade freely in 1984, as traders anticipated a cut at the Reserve Bank of Australia's April 7 meeting to stimulate the Australian economy after a slump in iron ore and coal prices. However, the kiwi failed to breach the historic level after the RBA unexpectedly kept the rate on hold. Still, with another RBA meeting looming on May 5, the chances for parity are increasing, UBS economists Robin Clements, Scott Haslem and George Tharenou said in a note. The kiwi was recently at 98.41 Australian cents.

"We are now forecasting the NZ dollar to achieve parity with the Australian dollar, and sooner rather than later (possibly after an anticipated RBA rate cut in May)," UBS said. "Last week's hard-commodity price forecast downgrades, and resultant lower Australian dollar forecasts, combined with New Zealand's relative growth story, suggests New Zealand dollar parity with the Australian dollar is likely, rather than just a risk. Moreover, our forecasts indicate the New Zealand dollar could stay above parity for some time."

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

UBS forecasts show the kiwi at parity by the June quarter of this year and staying above A$1 though its forecast period ending June 2016.

"With a pick-up in global headwinds and renewed upward pressure on the Australian dollar, the RBA is expected to take the path of least regret and trim the cash rate to further 'insure' the economic recovery, and protect the Australian dollar's recent fall," UBS said. "After February's cut, we look for another cut in May."

UBS reaffirmed its outlook for "ongoing solid growth" in New Zealand, which it expects to average around 3 percent this year and next.

(BusinessDesk)

© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Business Headlines | Sci-Tech Headlines

 
GenPro: General Practices Begin Issuing Clause 14 Notices

GenPro has been copied into a rising number of Clause 14 notices issued since the NZNO lodged its Primary Practice Pay Equity Claim against General Practice employers in December 2023.More

SPADA: Screen Industry Unites For Streaming Platform Regulation & Intellectual Property Protections

In an unprecedented international collaboration, representatives of screen producing organisations from around the world have released a joint statement.More

 
 
 
 
 
 
 
 
 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.