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

 

NZ dollar heads for 2% gain in 2016, belying volatile year

Friday 30 December 2016 02:01 PM

NZ dollar heads for 2% gain in 2016, belying volatile year

By Paul McBeth

Dec. 30 (BusinessDesk) - The New Zealand dollar is heading for a 2 percent gain against the greenback this year, belying the currency's volatility in a year that delivered unexpected results in the UK's vote on European Union membership and the US presidential election, as well as local interest rates sinking to a new record low.

The kiwi traded at 69.63 US cents at 1.30pm in Wellington from 68.25 cents at the start of the year. However, New Zealand's currency fell as low as 63.46 cents in January and peaked at 74.85 cents in September in a year that whipped the kiwi back and forth.

The greenback rallied through the final two months of the year after the surprise election of Donald Trump to the US presidency on a campaign of tax cuts and infrastructure spending gave the US Federal Reserve room to signal faster interest rate hikes next year after failing to deliver tighter policy this year.

The US dollar appreciation has slowed heading into the end of the financial year as investors look to lock in profits from that gain and as China reduced the weighting of the US dollar in its yuan index basket of currencies.

"We're definitely seeing some profit-taking, that's most of it, and the yuan thing exacerbated it in thin, illiquid markets," said Tim Kelleher, head of institutional FX sales NZ at ASB Institutional in Auckland. "There's been a big squeeze over the new year on US dollars - the forward market's quite illiquid - but it will get better" once trading desks re-open in January, he said.

The higher track for US interest rates has revived interest in global bond markets and boosted rates around the world, sapping expectations New Zealand's Reserve Bank will have to cut the official cash rate again. New Zealand's two-year swap rate was unchanged at 2.5 percent and is down from 2.83 percent a year ago, while 10-year swaps at 3.58 percent were down from 3.73 percent at the end of 2015.

On a trade-weighted basis, the kiwi is heading for a 4.4 percent gain in the year, trading at 77.57 at 1.30pm in Wellington from 74.28 at the end of 2016. Again, the TWI was more volatile, peaking at 79.30 in September, having troughed at 70.44 in January.

The kiwi is heading for a 22 percent gain against the British pound after the UK's currency was re-rated by investors after the surprise vote against Britain retaining its EU membership in late June. The kiwi traded at 56.63 British pence from 46.30 pence at the end of last year.

The local currency is heading for a 4.9 percent increase to 65.97 euro cents and a 2.6 percent rise to 96.15 Australian cents since the start of the year.

The kiwi is heading for an 8.7 percent gain to 4.8417 Chinese yuan, and a 1.1 percent decline to 81.04 yen.

(BusinessDesk)


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Mining: OceanaGold Announces Receipt Of WKP Mining Permit

MELBOURNE, Australia, Aug. 6, 2020 /CNW/ - OceanaGold Corporation (TSX: OGC) (ASX: OGC) (the 'Company') is pleased to announce it has received the mining permit for Wharekirauponga ('WKP') on the North Island of New Zealand. ... More>>

ALSO:

Economy: COVID-19 Lockdown Has Widespread Effects On Labour Market

In the June 2020 quarter, the seasonally adjusted unemployment rate fell to 4.0 percent, down from 4.2 percent last quarter, while underutilisation rose, Stats NZ said today. More>>

ALSO:

NZ Post: New Research By NZ Post Shows Online Shopping Grew 105% In Alert Level 3

New research by NZ Post into how the COVID-19 response has impacted the way Kiwis shop online, shows online shopping increased 105%* when the country moved into Alert Level 3, and may have changed the way Kiwis shop permanently. Online spend peaked ... More>>

ALSO:

Banking: Westpac NZ Lowers Merchant Fees For Small Businesses

Westpac NZ is rolling out a new merchant fee pricing structure that will lead to cost savings for more than 10,000 small and medium Kiwi businesses, and could make contactless transactions more widely available for customers. On 1 September, most ... More>>

REINZ: Million Dollar Plus Property Sales Increase 11.7% Nationally

The number of properties sold around the country for one million dollars or more during the first half (H1) of 2020 increased by 11.7% compared to H1 2019, with 5,426 million-dollar plus properties sold (up from 4,858 in H1 2019) according to the Real ... More>>

Waste: Government To Regulate Plastic Packaging, Tyres, E-Waste

The Government is stepping up action to deal with environmentally harmful products – including plastic packaging, tyres and e-waste – before they become waste. As part of the wider plan to reduce the amount of rubbish ending up in landfills, ... More>>

ALSO:


Antarctica NZ: Ice-Olation

Antarctica New Zealand is gearing up for a much reduced season on the ice this year and a very different deployment to normal! Before they head to one of the remotest places on the planet, all personnel flying south with the New Zealand programme will ... More>>

ALSO:

QV Valuations: July House Price Index Illustrates Market Resilience

According to the July 2020 QV House Price Index (HPI) results out today , property values recorded a marginal increase, up 0.2% over the month. This is somewhat of a turnaround from June, after the national index edged 0.2% lower. More>>

ALSO:

Property: Queenstown Rents Experience Biggest Drop In Seven Years

Rental prices in the Queenstown-Lakes district saw the biggest annual percentage drop in seven years after falling 28 per cent on June last year, according to the latest Trade Me Rental Price Index. Trade Me Property spokesperson Aaron Clancy said ... More>>

Seismology: The Quiet Earth

As many daily activities came to a halt during lockdown, the Earth itself became quiet, probably quieter than it has been since humans developed the technology to listen in. Seismologists have analysed datasets from more than 300 international ... More>>

RNZ: James Shaw Says Kiwibank, Not Ministers Should Decide On Investors

Climate Change Minister James Shaw says Kiwibank's decision to stop doing business with companies dealing in fossil fuels is the right one. More>>

ALSO:

FMA: Kiwis Confident Financial Markets Will Recover From COVID-19, Plan To Increase Investments

Despite the majority (60%) of investors experiencing losses as a result of COVID-19, the outlook on investing remains positive, according to a Financial Markets Authority (FMA) survey. Most Kiwis (71%) were optimistic that the pandemic will pass eventually ... More>>

FIRST Union: Warehouse Using Covid For Cover As Extensive Restructure Makes Everyone Worse Off

(FIRST Union comments on The Warehouse consultation and proposed restructure) 'Unfortunately the Warehouse have done the disappointing thing and used Covid-19 to justify a bunch of operational business decisions that will leave hundreds of workers without jobs ... More>>

ALSO: