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


NZ dollar pares gain vs. Aust after RBA cuts key rate

NZ dollar pares gain vs. Aust after RBA cuts key rate to 2.5 percent

By Paul McBeth

Aug 6 (BusinessDesk) - The New Zealand dollar pared gains against its Australian counterpart after the central bank cut interest rates across the Tasman, matching the local key rate, but without indicating if there’s scope for further cuts.

The kiwi fell to 87.47 Australian cents at 5pm in Wellington from 87.72 cents immediately before the announcement and 87.53 cents yesterday. The local currency traded at 78.51 US cents from 78.05 cents at 8am and 77.71 cents yesterday.

The Reserve Bank of Australia cut the target cash rate a quarter point to 2.5 percent to help stoke a slowing economy. Governor Glenn Stevens said the economy has been below trend in the past year, and while a weaker Australian dollar has helped, the currency is still over-valued. Whereas previously he has indicated whether there’s scope for another cut, he didn’t offer any guidance in today’s statement. The Australian dollar rose to 89.70 US cents at 5pm in Wellington from 89.25 cents immediately before the release.

“The market was a bit short and caught – Aussie rates came up a little bit as people had more cuts priced in,” said Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney. “That’s what’s driving the Aussie a little higher.”

The local currency recovered after being sold off yesterday amid a food contamination scare at Fonterra Cooperative Group, New Zealand’s biggest company. Dairy products account for about a quarter of New Zealand’s exports.

Finance Minister Bill English today told Parliament he expects the local economy will only suffer a small hit from the food scare. CBA’s Tennent-Brown said tomorrow’s GlobalDairyTrade auction will give a good steer on the market’s reaction to the news.

Government figures are expected to show New Zealand’s unemployment rate increased to 6.3 percent in the June quarter from 6.2 percent in the first three months of the year. The jobless rate came down more than expected in the March quarter.

The local currency rose to 77.11 yen at 5pm in Wellington from 76.76 yen and gained to 51.13 British pence from 50.88 pence. It increased to 59.18 euro cents from 58.54 cents yesterday. The trade-weighted index advanced to 74.37 from 73.81 yesterday.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Stats NZ: Largest Drop In Terms Of Trade In A Decade As Dairy Export Prices Sour

Lower export prices for dairy, meat, and logs in the September 2020 quarter led to the biggest drop in terms of trade since June 2009, Stats NZ said today. Export prices fell in the September 2020 quarter, down 8.3 percent from its highest ever ... More>>


Stats NZ: Election Boosts October Job Numbers

Job numbers were boosted by general election staff in October 2020, along with rises in the manufacturing, retail, and hospitality industries, Stats NZ said today. Filled jobs rose by 27,667 to 2.2 million in October 2020 compared with September, after ... More>>

Government: New Year Border Exception For Seasonal Workers In The Horticulture And Wine Industries

2000 additional RSE workers to enter New Zealand early next year employers must pay these workers at least $22.10 an hour employers will cover costs of managed isolation for the RSE workers RSE workers will be paid the equivalent of 30 hours work a week ... More>>


Media: Discovery, Inc. Completes Acquisition Of New Zealand’s Mediaworks TV Ltd

Auckland, New Zealand, December 1, 2020 - Discovery, Inc. (“Discovery”), the global leader in real-life entertainment, has completed its acquisition of New Zealand’s leading independent free-to-air commercial broadcaster, MediaWorks TV Ltd, now operating ... More>>

Department Of Conservation: Big Year Underway At Albatross Colony

Familiar faces are returning for the new season of Royal Cam, with a big breeding year underway for the toroa/northern royal albatross colony on Otago’s windswept Pukekura/Taiaroa Head. More than 120 albatrosses, a taonga species, have returned ... More>>

Real Estate: ASB Survey Reveals Majority Of Kiwis Expect House Prices To Keep Climbing


House price expectations are soaring as New Zealand’s housing market shifts up a gear. But stretched affordability is putting a dent in perceptions of whether it’s a good time to buy. While Kiwis reveal they do expect interest rates to fall further. ... More>>

Stats NZ: Births And Deaths: Year Ended September 2020

Births and deaths releases provide statistics on the number of births and deaths registered in New Zealand, and selected fertility and mortality rates. Key facts For the year ended September 2020: 57,753 live births and 32,670 deaths ... More>>