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

 

NZ dollar heads for 1.9% gain in September quarter

Friday 30 September 2016 05:26 PM

NZ dollar heads for 1.9% gain in September quarter; bank stocks keep investors on edge

By Paul McBeth

Sept. 30 (BusinessDesk) - The New Zealand dollar is heading for a 1.9 percent gain against the greenback this quarter as the country's relatively high interest rates and strong economic outlook continue to attract investors, though concerns about global banks are tempering appetite for risk-sensitive assets.

The kiwi rose to 72.64 US cents at 5pm in Wellington from 71.30 cents at the start of the quarter. It was little changed from 72.56 cents at 8am and down from 72.90 cents yesterday. The trade-weighted index is heading for a 1.7 percent quarterly gain to 77.17. The TWI was little changed from 77.26 yesterday.

New Zealand's currency has been a beneficiary of major central banks running near-zero interest rate policies, making the relatively high local rates on offer attractive to international investors. A strong domestic economy and recovering global dairy prices have supported that demand, through investors are becoming wary that the Reserve Bank of New Zealand will lower the official cash rate later this year.

"The kiwi's going to be supported on dips because of the yield and that it's seen as a safe haven" compared to the political risks facing Europe and North America, said Tim Kelleher, head of institutional FX sales NZ at ASB Institutional in Auckland. "It's been pretty well supported on any dips at 72/72.50 US cents. It would have to go below 72 cents for it to get a run on."

Kelleher said fears about the banking sector are weighing on investors going into the quarter-end with the US Department of Justice seeking a US$14 billion claim against Germany's Deutsche Bank over an investigation into residential mortgage-backed securities. Hedge funds have started withdrawing some of their business from the bank and the German government is coming under increased pressure to show it's ready to stand behind the lender. Germany's second biggest bank, Commerzbank, this week announced plans to lay off 9,600 people and suspend dividends to see it through a period of dwindling profits.

Local data today showed a slowing in new residential building consents, with the number of new permits falling in August, while a business confidence survey showed firms were upbeat about both the economy and their own activity.

New Zealand's two-year swap rate fell two basis points to 1.96 percent, and was down 26 basis points in the quarter, while 10-year swaps dropped five basis points to 2.4 percent, falling 25 basis points in the quarter, reflecting the one quarter-point cut made by the Reserve Bank in August.

The kiwi increased to 95.15 Australian cents from 94.75 cents yesterday and fell to 4.8415 Chinese yuan from 4.8658 yuan. It declined to 73.63 yen from 73.95 yen and dropped 64.74 euro cents from 65 cents. It was little changed at 55.99 British pence from 56.02 pence.

(BusinessDesk)


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Snail's Pace: Aucklanders Face Frustrating Commute Over Harbour Bridge

Journeys into Auckland's CBD took longer than usual as traffic banked up around the damaged Harbour Bridge. More>>

ALSO:

Statistics New Zealand: COVID-19 Sees Record 12.2 Percent Fall In New Zealand’s Economy

Gross domestic product (GDP) fell by 12.2 percent in the June 2020 quarter, the largest quarterly fall recorded since the current series began in 1987, as the COVID-19 restrictions in place through the quarter impacted economic activity, Stats NZ said ... More>>

ALSO:

Climate: Scientists Release ‘Blueprint’ To Save Critical Ecosystems And Stabilize The Earth’s Climate

A group of scientists and experts produced the first comprehensive global-scale analysis of terrestrial areas essential for biodiversity and climate resilience, totaling 50.4% of the Earth's land. The report was published in Science Advances ... More>>

ALSO:

MPI: Independent Review Launched Into Assurances For Safe Transport Of Livestock By Sea

The Ministry for Primary Industries (MPI) has launched an independent review of the assurances it receives for the safe transport of livestock by sea. MPI Director-General Ray Smith says Mike Heron QC has been appointed to lead the review, which is expected ... More>>

ALSO:


Computers: New Zealand PC Market Grows Nearly 40% Due To Work From Home Demand

COVID-19 had large impacts on demand for PCs as businesses prepared for lockdowns by purchasing notebooks to mobilise their workforce. In the second quarter of 2020, New Zealand's Traditional PC market experienced a 39.7% year-on-year (YoY) growth ... More>>

ALSO:


Ministry of Health: Public Transport Distancing Requirements Relaxed

Physical distancing requirements on public transport have been reviewed by the Ministry of Health to determine whether they are still required at Alert Level 2 (or below). The Ministry’s assessment is that mandatory face covering and individuals tracking ... More>>

ALSO:

NZHIA: New Zealand Hemp Industry Set To Generate $2 Billion Per Annum And Create 20,000 Jobs

A new report says a fully enabled hemp industry could generate $2 billion in income for New Zealand by 2030, while also creating thousands of new jobs. Written by industry strategist Dr Nick Marsh, the report has prompted calls from the New Zealand Hemp ... More>>

ALSO:

Stats NZ: One In 14 Employed People Report High Risk Of Losing Jobs

About one in 14 workers say they expect to lose their job or business by mid-2021, Stats NZ said today. A survey of employed people in the June 2020 quarter showed 7 percent felt there was a high or almost certain chance of losing their job or business ... More>>

ASB Quarterly Economic Forecast: NZ Economy Doing Better Than Expected, But Challenges Remain

August lockdown estimated to have shaved 8% off NZ’s weekly GDP, and 0.5% off annual GDP Economy now expected to shrink 5% (year-on-year) by end of 2020 Unemployment rate now expected to peak at 7.2% The latest ASB Quarterly Economic Forecast is less ... More>>

ALSO:

SAFE: Live Export Ship Carrying 5,800 New Zealand Cows Goes Missing In East China Sea

Livestock carrier Gulf Livestock 1 sent a distress signal at 4:45am NZT yesterday in the East China Sea. The area is affected by Typhoon Maysak. At 4pm a patrol plane spotted a lifeboat - with no people in it - and a man in lifejacket nearby. The ship ... More>>

ALSO:

FMA: Kiwisaver Fees Don't Match Performance

The Financial Markets Authority (FMA) today published an independent report into the passive and active investment management styles [i] used by KiwiSaver providers. The FMA commissioned MyFiduciary to test the extent that KiwiSaver providers were ... More>>