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


NZ dollar holds gains against Aussie

NZ dollar holds gains against Aussie on disappointment RBA didn't turn hawkish

By Jonathan Underhill

July 5 (BusinessDesk) - The New Zealand dollar held its gains against the Australian dollar, which was sold yesterday on disappointment the Reserve Bank of Australia didn't take its cue from other central banks who have turned hawkish, preferring to reiterate its preference to keep policy in a neutral setting.

The kiwi rose to 95.62 Australian cents as at 5pm in Wellington from 95.31 cents late yesterday. The local currency traded at 72.83 US cents from 72.70 cents yesterday with the July 4 Independence Day holiday in the US keeping markets across Asia relatively quiet.

The Australian dollar fell after RBA governor Philip Lowe said that his board "judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time". Some traders had expected he would take a lead from colleagues at central banks in Canada, England, Europe and even from Sweden's Riksbank in talking up the prospects of interest rate increases. The change in tone leaves the RBA and New Zealand's central bank more defiantly neutral than many of the peers.

"The Aussie is still suffering from the RBA yesterday and the kiwi-Aussie cross has rallied quite hard," said Tim Kelleher, head of institutional foreign exchange sales at ASB Bank. "The market has surmised that maybe the RBA would change its tune so the reaction has been to sell the currency."

The week may be about to heat up, with heavy releases of economic data scheduled for Thursday and Friday and key leaders set to meet at the G-20 meeting at the weekend, Kelleher said. The minutes of the last Federal Reserve policy meeting are released on Wednesday in the US and Thursday brings Australian trade for May, US ADP payrolls for June, the US May trade balance and the US June non-manufacturing ISM survey. The European Central Bank's June meeting minutes are also released on Thursday. Friday brings the key non-farm payrolls data for June in the US.

The kiwi didn't move much after prices fell for a second time at the GlobalDairyTrade auction overnight or after the ANZ Commodity Price Index showed a 2.1 percent gain in prices in June, led by milkfat and sheepmeat.

The trade-weighted index increased to 78.26 from 78.08 yesterday. The kiwi gained to 4.9504 Chinese yuan from 4.9406 yuan, advanced to 64.14 euro cents from 63.93 cents and increased to 56.38 British pence from 56.15 pence. The kiwi gained to 82.45 yen from 82.24 yen yesterday.

New Zealand's two-year swap rate fell 1 basis point to 2.30 percent while the 10-year swaps fell 2 basis points to 3.34 percent.


© Scoop Media

Business Headlines | Sci-Tech Headlines


By May 2018: Wider, Earlier Microbead Ban

The sale and manufacture of wash-off products containing plastic microbeads will be banned in New Zealand earlier than previously expected, Associate Environment Minister Scott Simpson announced today. More>>


Snail-ier Mail: NZ Post To Ditch FastPost

New Zealand Post customers will see a change to how they can send priority mail from 1 January 2018. The FastPost service will no longer be available from this date. More>>


Property Institute: English Backs Of Debt To Income Plan

Property Institute of New Zealand Chief Executive Ashley Church is applauding today’s decision, by Prime Minister Bill English, to take Debt-to-income ratios off the table as a tool available to the Reserve Bank. More>>


Divesting: NZ Super Fund Shifts Passive Equities To Low-Carbon

The NZ$35 billion NZ Super Fund’s NZ$14 billion global passive equity portfolio, 40% of the overall Fund, is now low-carbon, the Guardians of New Zealand Superannuation announced today. More>>


Split Decision - Appeal Planned: EPA Allows Taranaki Bight Seabed Mine

The Decision-making Committee, appointed by the Board of the Environmental Protection Authority to decide a marine consent application by Trans-Tasman Resources Ltd, has granted consent, subject to conditions, for the company to mine iron sands off the South Taranaki Bight. More>>