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

 

NZ dollar gains ahead of stress-test details, G-20

NZ dollar gains ahead of stress-test details, G-20 meeting

By Paul McBeth

The New Zealand dollar gained as U.S. policy makers prepare to unveil how they will assess the ability of America’s largest banks to cope with ongoing financial crisis and finance ministers of the Group of 20 nations gather in Washington to discuss the global economic slump.

U.S. Treasury Secretary Timothy Geithner will unveil the methodology for the stress tests of 19 banks in the U.S. today, and may force banks that are judged to require capital to disclose how they will attract additional funds. Finance ministers from the world’s largest industrial nations will meet in Washington this weekend to follow up on pledges made to lift the global economy out of recession. Investors in the kiwi are awaiting the central banks review the official cash rate next week, with the market predicting Governor Alan Bollard will cut rates by either 25 basis points or 50 basis points.

“We’ll probably see analysts use the methodology to second-guess and predict the results” of the stress tests on May 4, said Philip Borkin, economist at ANZ National Bank. “The big impact will be on risk and sentiment” which could see some volatility in the markets, he said.

The kiwi gained to 56.14 U.S. cents from 55.94 cents yesterday, and dropped to 54.88 yen from 54.99 yen. It slipped to 78.46 Australian cents from 78.70 cents yesterday, and declined to 42.67 euro cents from 42.79 cents.

Borkin said the kiwi may trade between 55.50 U.S. cents and 56.20 cents today as investors wait for the central bank to review the official cash rate next Thursday. Due to the indecision by the market to price in a cut of either 25 or 50 basis points, there’s “likely to be a reaction” to either move, he said.

Meanwhile, sentiment in the Eurozone improved with a better-than-expected result by Credit Suisse Group, the biggest Swiss bank, which posted a US$1.7 billion first-quarter profit. Stronger services and manufacturing data added to the perceived improvement in the regional economy.

The euro gained to US$1.3144 from US$1.3067 yesterday, propelled by Middle Eastern and Eastern European accounts, said Danica Hampton, currency strategist at Bank of New Zealand.

(Businesswire)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

SMC Expert Reaction: Record Dry Spells And Effects On Forests

With no rain forecast before Sunday, Auckland is about to break a record for the city's longest dry spell. Niwa says Auckland is likely to hit 40 consecutive days without rain this weekend . The upper North Island is seeing severe meterological ... More>>

ALSO:

Reserve Bank: Official Cash Rate Remains At 1.0 Percent

The Monetary Policy Committee has decided to keep the Official Cash Rate (OCR) at 1.0 percent. Employment is at or slightly above its maximum sustainable level while consumer price inflation is close to the 2 percent mid-point of our target range. ... More>>

ALSO:

Research: Climate Change Throws Tree Seeding Out Of Sync – New Study

Climate change is negatively affecting tree reproduction by throwing seed production systems out of synchronisation, according to a new international study co-authored by a University of Canterbury scientist. Many tree species worldwide produce large ... More>>

ALSO:


Science Media Centre: Novel Coronavirus Detected In China – Expert Reaction

The virus was detected after more than 40 people were hospitalised with pneumonia in Wuhan City, China and the outbreak traced to a large animal and seafood market. The Centers for Disease Control and Prevention reports that person-to-person transmission ... More>>

ALSO:

Science Media Centre: Flooding could release toxic gas – Expert Reaction

A chemical substance known as ouvea premix stored at an old paper mill in Mataura could release toxic ammonia gas if it comes in contact with water.More>>

ALSO: