Scoop has an Ethical Paywall
License needed for work use Register

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


NZ dollar rises as QE3, German ruling on rescue fund looms

NZ dollar rises above 82 US cts as QE3, German ruling on rescue fund loom; RBNZ in background

By Paul McBeth

Sept. 12 (BusinessDesk) - The New Zealand dollar rose above 82 US cents for the first time in a month as stock markets across Asia rallied on optimism the Federal Reserve will start printing more money and the German courts will approve the legality of a Europe-wide bailout fund.

The kiwi rose to 82.02 US cents at 5pm in Wellington from 81.86 cents at 8am and 81 cents yesterday. The trade-weighted index advanced to 72.84 from 72.36 yesterday.

Equity markets across the Asia Pacific rallied today in anticipation US policymakers and the German judiciary will give more credibility to efforts to shore up the global economy. Japan's Nikkei 225 index rose 1.6 percent in afternoon trading, while Hong Kong's Hang Seng was up 0.8 percent and Australia's S&P/ASX 200 index rose 0.9 percent.

The Federal Open Market Committee will announce its monetary policy review on Thursday in Washington, and chairman Ben Bernanke is tipped to unveil a third round of asset purchases while pushing out the timeframe for near-zero interest rates, while Germany's Federal Constitutional Court is set to judge the legality of the nation taking part in the 500 billion euro European Stability Mechanism.

"The underlying fundamentals for the global economy continue to look pretty average," said Dan Bell, currency strategist at HiFX in Auckland. "We might see a continuation of this kiwi upside over the next few days, but it's going to come back down to Earth."

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.

The local currency was supported in the Northern Hemisphere trading session after Moody's Investors Service warned the US its Aaa credit rating was at risk if it didn't rein in its public debt, something that cost its AAA-rating with Standard & Poor's last year when legislators failed to reach any meaningful compromise to lift the nation's debt ceiling.

New Zealand's AA credit rating was affirmed by Fitch Ratings on the strength of its sound fiscal and monetary policies. That comes ahead of tomorrow's Reserve Bank of New Zealand meeting, where governor Alan Bollard is expected to keep the benchmark interest rate at 2.5 percent.

The New Zealand dollar was little changed at 78.24 Australian cents from 78.26 cents yesterday, and climbed to 63.83 yen from 63.35 yen. It advanced to 51.02 British pence from 50.59 pence yesterday, and gained to 63.71 euro cents from 63.42 cents.


© Scoop Media

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

FMA: MAS To Pay $2.1M Penalty For Making False Representations

Following proceedings brought by the FMA, MAS has been ordered to pay a $2.1M penalty for making false and/or misleading representations to some customers. MAS admitted failing to correctly apply multi-policy discounts and no claims bonus discounts to some customers, failing to correctly apply inflation adjustments on some customer policies, and miscalculating benefit payments.More

IAG: Call On New Government To Prioritise Flood Resilience

The economic toll of our summer of storms continues to mount, with insurance payouts now topping $1B, second only to the Christchurch earthquakes. AMI, State, & NZI have released the latest Wild Weather Tracker, which reveals 51,000 claims for the North Island floods & Cyclone Gabrielle, of which 99% (motor), 97% (contents), and 93% (home) of claims have now been settled. 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.