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

 

NZ dollar bounces back as U.S. economy grows

NZ dollar bounces back as U.S. economy grows more than expected

by Paul McBeth

Oct. 30 (BusinessWire) – The New Zealand dollar bounced back from its three-week low after the U.S. economy grew more than expected in the third quarter, and eased concerns the global recovery is beginning to stall.
The world’s largest economy grew 3.5% annualised in the three months ended Sept. 30, more than the 3.2% predicted, and prompted investors to return to higher-yielding, riskier assets after lacklustre data over the past few days had eroded confidence in the global recovery.

Stocks on Wall Street gained on the news, with the Dow Jones Industrial Average climbing 2.1% as traders pared back their positions in so-called safe-haven assets such as the greenback and yen.

“Everyone that decided to sell yesterday climbed out of their safe haven positions” and took on riskier assets again, said Danica Hampton, currency strategist at Bank of New Zealand. “There’s still some concern out there about the global recovery. Fiscal stimulus underpinned the GDP number, and that may not be a good barometer of growth.”

The kiwi jumped to 73.51 U.S. cents from 72.58 cents yesterday, and has gained 1.6% this month. It rose to 65.99 on the trade-weighted index, or TWI, a measure of the currency against a basket of five trading partners, from 65.45 yesterday, and dropped to 80.07 Australian cents from 80.28 cents.

It surged to 67.19 yen from 65.78 yen yesterday and increased to 49.48 euro cents from 49.20 cents. It advanced to 44.39 pence from 44.17 pence yesterday.

Hampton said the currency may trade between 72.30 U.S. cents and 73.75 cents today and will follow Asian equity markets amid the upturn in global sentiment.

The Reserve Bank of New Zealand yesterday kept the official cash rate at a record-low 2.5% and Governor Alan Bollard made it clear to the markets that he isn’t going to begin tightening monetary policy prematurely.

Bollard said “in contrast to current pricing, we see no urgency to begin withdrawing monetary policy stimulus” and that rates are expected to stay at the same level until the second half of next year.

Hampton said Bollard’s stance took the heat out of the interest rate swaps market, with a sharp sell-off in New Zealand swaps and an increase in U.S. swap rates showing a “definite narrowing” of the spread.

The Bank of Japan will review its benchmark interest rate today, and while it isn’t expected to move, it will give traders another insight into the region’s sentiment. Meanwhile, the University of Michigan Consumer Confidence Survey and the Chicago PMI come out in the U.S. today, and should add to the picture of the world’s largest economy.

(BusinessWire) 10:00:48

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

RNZ: Housing Boom Could Get Worse, Economist Warns

Economists are calling on the Reserve Bank to reinstate lending restrictions, warning the housing market is spiralling out of control. More>>

ALSO:

Westpac: Sets Out Plan To Go Cheque-Free

Westpac NZ has announced details of its plan to phase out cheques, after signalling in May that it would be supporting a move to other forms of payment. Cheques will cease to be available as a means of payment after 25 June 2021. Westpac NZ General ... More>>

ALSO:

NZTA: Major New Zealand Upgrade Programme Projects Go To Tender

Two major New Zealand Upgrade Programme projects are beginning tenders for construction. The New Zealand Upgrade Programme is a $6.8 billion investment to get our cities moving, to save lives and boost productivity in growth areas. The first Auckland ... More>>

Reserve Bank: RBNZ Seeks To Preserve Benefits Of Cash

The Reserve Bank – Te Pūtea Matua is taking on a new role of steward of the cash system “to preserve the benefits of cash for all who need them”, Assistant Governor Christian Hawkesby told the Royal Numismatics Society of New Zealand annual conference ... More>>

ALSO:

Economy: Double-Dip Recession Next Year, But Housing Rolls On

New Zealand's economy is expected to slip back into recession early next year as delayed job losses, falling consumer spending, and the absence of international tourists bites into growth. More>>

ALSO:

Microsoft New Zealand: Microsoft Expands “Highway To A Hundred Unicorns” Initiative To Support Startups In Asia Pacific

New Zealand, 14 October 2020 – Today Microsoft for Startups launches the Highway to a Hundred Unicorns initiative in Asia Pacific to strengthen the region’s startup ecosystem. This follows the initiative’s success in India, where 56 startups were ... More>>

Economy: NZ Small Business Recovery Continues In September

Xero, the global small business platform, today released its Small Business Insights (XSBI) for September revealing an uptick in small business jobs and year-on-year revenue growth in New Zealand. Nationwide, the average number of jobs in the small ... More>>

ALSO:


Courts: Businessman Eric Watson Sentenced To A Four-Month Jail Term

New Zealand businessman Eric Watson has been sentenced to a four-month jail term in the UK for contempt of court, TVNZ reports. More>>

OECD: Area Employment Rate Falls By 4.0 Percentage Points, To 64.6% In Second Quarter Of 2020

The OECD area employment rate – the share of the working-age population with jobs – fell by 4.0 percentage points, to 64.6%, in the second quarter of 2020, its lowest level since the fourth quarter of 2010. Across the OECD area, 560 million persons ... More>>

Spark: Turns On 5G In Auckland And Offers A Glimpse Into The Future Of Smart Cities

Spark turned on 5G in downtown Auckland today and has partnered with Auckland Transport (AT) to showcase some of the latest in IoT (Internet of Things) technology and demonstrate what the future could look like for Auckland’s CBD with the power of 5G. 5G is ... More>>

Stats NZ: Monthly Migration Remains Low

Since the border closed in late-March 2020, net migration has averaged about 300 a month, Stats NZ said today. In the five months from April to August 2020, overall net migration was provisionally estimated at 1,700. This was made up of a net gain ... More>>

University of Canterbury: Proglacial Lakes Are Accelerating Glacier Ice Loss

Lake Tasman, New Zealand | 2016 | Photo: Dr Jenna Sutherland Meltwater lakes that form at glacier margins cause ice to recede much further and faster compared to glaciers that terminate on land, according to a new study. But the effects of these glacial ... More>>

ALSO: