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


NZ dollar rise vs. Australian dollar on Westpac rate hike

NZ dollar rise vs. Australian dollar as Westpac rate hike puts pressure on RBA

By Paul McBeth

Oct. 14 (BusinessDesk) - The New Zealand dollar rose to a four-month high against its trans-Tasman counterpart on speculation mortgage rate hikes by Westpac Banking Corp may put pressure on the central bank to ease policy.

The kiwi rose as high as 92.40 Australian cents, trading at 92.27 cents at 5pm in Wellington from 91.20 cents yesterday. The local currency was little changed at 66.76 US cents from 66.71 cents at 8am and 66.62 cents yesterday.

The Australian dollar dropped after Westpac announced plans to lift its floating mortgage rate by 20 basis points to reflect new risk weightings under a tougher regulatory regime that prompted Australia's second biggest bank to raise more capital. The move prompted traders to increase their bets for another rate cut by the Reserve Bank of Australia to prevent Westpac's move from cooling the housing market and chilling development.

"The move by Westpac in Australia to raise lending rates by 20 basis points immediately led the market to believe that the RBA will be forced to cut rates in the coming months," said Stuart Ive, senior dealer foreign exchange at OMF in Wellington. "The Australian dollar got sold aggressively and kiwi benefitted from that on the kiwi/Aussie cross."

New Zealand Reserve Bank governor Graeme Wheeler today said more interest rate cuts are likely, depending on the flow of economic data, although he was aware of the risk that cheaper borrowing costs could stoke demand in the property market.

OMF's Ive said if Australia cuts interest rates further, that could put pressure on New Zealand's Reserve Bank to continue easing.

New Zealand's two-year swap rate was unchanged at 2.7 percent at 5pm in Wellington, and 10-year swaps fell two basis points to 3.52 percent.

The New Zealand government returned to an operating surplus in the year ended June 30, with an unexpectedly higher tax take ending a six-year run of deficits. Finance Minister Bill English said he will focus on reducing public debt over the medium-term.

The local currency advanced to 4.2378 Chinese yuan from 4.2213 yuan yesterday after official data showed China's consumer and producer prices were softer than expected in September.

The kiwi was little changed at 79.90 yen from 79.78 yen yesterday, and traded at 58.62 euro cents from 58.65 cents. It was little changed at 43.67 British pence from 43.61 pence. The trade-weighted index advanced to 71.64 from 71.36 yesterday.


© Scoop Media

Business Headlines | Sci-Tech Headlines


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>>


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>>


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>>

Fonterra: Farmers Taking Another Step Towards New Zealand’s Low Emissions Food Production

They’re hot off the press and intended to help take the heat out of climate change. Fonterra farmers are already among the world’s most sustainable producers of milk and now have an additional tool in their sustainability toolbox. Over the last few ... More>>


Electricity: New Zealand Remains In Top 10 For Energy Balance

The World Energy Council’s Energy Trilemma Index has become part of the energy dialogue both globally and in New Zealand. The Index illustrates the need for countries to balance energy security, energy equity and environmental sustainability. New Zealand ... More>>


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>>


Dairy: Fonterra Sells China Farms

Fonterra has agreed to sell its China farms for a total of $555 million (RMB 2.5 billion*1), after successfully developing the farms alongside local partners. Inner Mongolia Natural Dairy Co., Ltd, a subsidiary of China Youran Dairy Group Limited ... More>>