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


NZ dollar holds gains against greenback but capped

NZ dollar holds gains against greenback but capped by political uncertainty

By Rebecca Howard

Oct. 16 (BusinessDesk) - The New Zealand dollar held onto its gains against the greenback but political uncertainty will likely keep it capped with investors awaiting an announcement on the country's next government.

The kiwi was trading at 71.72 as at 5pm in Wellington versus 71.66 US cents as at 8am in Wellington and 71.65 cents in late New York trading on Friday. The trade-weighted index rose to 75.30 from 75.04 last week.

The New Zealand dollar benefited after weaker-than-expected US inflation hurt the US dollar at the end of last week but may not push much higher until a new government is formed. Acting Prime Minister Bill English told Radio New Zealand it could take until the end of the week to confirm the country’s next government as there are still outstanding issues and further talks are needed before a government can be formed.

The kiwi had a "stronger end to the week on the back of the US dollar move and we have really just maintained that," said ANZ senior economist Phil Borkin. "Our view is that further gains from here, until we get political clarity, look a stretch. We are more biased to it easing off a little bit. It's a harder road higher from here, even in the context of a weaker US dollar."

Borkin said that tomorrow's third-quarter domestic inflation numbers could move the currency around if they are a surprise but any moves were likely to be temporary.

Economists expect inflation was 0.4 percent in the three months ended Sept. 30, for an annual rate of 1.8 percent, according to the median in a poll of 13 economists surveyed by Bloomberg. That compares to the central bank’s projection of inflation of 0.2 percent in the third quarter for an annual rise of 1.6 percent.

Borkin said even if the headline inflation is higher than expected the details will show that core inflation is still tepid and the data is unlikely to sway the central bank, which has signaled interest rates are likely to remain on hold at a record low 1.75 percent until September 2019 at the earliest.

The kiwi traded at 91.06 Australian cents from 90.93 cents on Friday in New York. It traded at 4.7170 yuan from 4.7135 yuan and at 80.26 yen from 80.13 yen. The kiwi traded at 53.96 British pence from 53.81 pence in New York and at 60.75 euro cents from 60.58 cents.

New Zealand's two-year swap rate was down 1 basis point at 2.18 percent, and 10-year swaps were down 4 basis points to 3.19 percent.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Campaign For NZ Coastal Tankers : Says Fuel Security At Risk

Three unions representing New Zealand shipping crews are mounting a united campaign to protect New Zealand’s fuel security and save New Zealand coastal tankers... More>>

Tourism: Travel Bubble With Cook Islands Resumes

Cook Islands tourism restarts today, ending a five-month border closure due to COVID-19. Graeme West, General Manager Australasia for Cook Islands Tourism Corporation, said today’s first flight of quarantine-free travel from New Zealand to the Cook Islands is very significant... More>>

Plant & Food: Research And Lincoln University Part Of Game Changing Gene Discovery
Scientists from Plant & Food Research and Lincoln University have contributed knowledge integral to the discovery of a new gene described as a game changer for global agriculture.
The gene allows natural reproduction by cloning in plants... More>>

Statistics: Building Consents Hit New Highs In November
There were a record 48,522 new homes consented in the year ended November 2021, Stats NZ said today. This was up 26 percent compared with the year ended November 2020... More>>

Fonterra: Revises Milk Collection Forecast
Fonterra Co-operative Group Limited today revised the forecast for its 2021/22 New Zealand milk collections to 1,500 million kilograms of milk solids (kgMS), down from its opening forecast of 1,525 million kgMS... More>>

ComCom: Clearance Sought For Vocus / 2degrees Merger

The Commerce Commission has received an application for clearance in relation to a transaction that would see the merger of the Vocus Group with 2degrees. Vocus and 2degrees are both telecommunications providers that primarily supply retail fixed voice and broadband services... More>>