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


MPI: Dry Autumn In Waikato And South Auckland Leads To Drought Classification Drought conditions affecting the primary sector in the Waikato and South Auckland were today classified as a medium-scale adverse event, enabling a package of support for farmers and growers... More>>

Commerce Commission: Invites Feedback On Its Initial Views Of Wellington Airport’s Pricing Decisions

The Commerce Commission is inviting feedback on its initial views, released today, about Wellington Airport’s pricing decisions for specified airport services, such as aircraft parking or airfield and passenger terminal charges, for the period 1 April 2019 to 31 March 2024... More>>

Government: Lower Card Fees On Way For Business, Consumers

A Bill to help lower the fees charged when credit and debit transactions are made, will save New Zealand businesses around $74 million a year... More>>

Barfoot & Thompson: Rents Up By Around 3% In Most Areas

The average weekly rent paid for homes in most areas of Auckland has risen by around 3 percent year-on-year. The figures for end March from more than 16,000 properties... More>>

DoC: Smeagol The ‘Gravel Maggot’ Leaves Its Rare Mark On The Remote West Coast
An extremely rare species of sea slug or ‘gravel maggot’ has been detected for the first time on a remote beach in South Westland... More>>

Immigration: Annual Net Migration Loss Of 7,300

The provisional net loss of 7,300 people in the year ended March 2022 was the lowest net migration for a March year since 2012, Stats NZ said today... More>>