Top Scoops

Book Reviews | Gordon Campbell | Scoop News | Wellington Scoop | Community Scoop | Search


NZ dollar gains on growing risk appetite

NZ dollar extends gains on growing risk appetite

By Paul McBeth

Feb. 10 – The New Zealand dollar extended its gains for a second day to the highest in three weeks as risk appetite continued to grow amid expectations the fiscal stimulus package in the U.S. will help offset the declining global economy.

U.S. Treasury Secretary Timothy Geithner delayed the announcement of the Obama Administration’s rescue package, and is seeking to draw investors into the programme to help reduce levels of toxic debt on banks’ balance sheets. The prospect of the stimulus shoring up the global economic slump encouraged currency traders to eschew safe haven currencies for higher-yielding, or riskier, assets. Australian and New Zealand benchmark rates are still relatively high, and more attractive, than other countries with top sovereign ratings at Moody’s Financial Services, giving support to their currencies when there’s a rising risk appetite.

“Investors seem to be focusing on the positive impact the new measures should have on the beleaguered financial system and the outlook for global growth,” said Danica Hampton, currency strategist at Bank of New Zealand. “The kiwi outperformed everything last night” as investors sought higher yields, she said.

The New Zealand dollar jumped to 54.09 U.S. cents from 52.89 cents yesterday, and rose to 49.52 yen from 48.33 yen. It increased to 41.51 euro cents from 41.01 cents yesterday, and was up to 79.50 Australian cents from 79.08 cents.

Hampton said the currency may trade between 53 U.S. cents and 54.50 cents today, and is likely to push to 55.50 cents this week. New Zealand’s economic situation is still ugly, and “this is just a small respite” which will probably last for a couple of days, she said

New Zealand’s corporate earnings season begins this week, with Fletcher Building Ltd. posting its half-year result on Thursday, and Telecom Corp.’s second quarter earnings out on Friday. The prolonged domestic recession will probably show weaker profits, indicating a deteriorating economic situation in New Zealand.

Retail sales for December will be released on Friday, and are predicted to show a poor result. ANZ National Bank forecasts a fall in core spending of 0.7%, with quarterly volumes likely to have dropped 0.5%.


© Scoop Media

Top Scoops Headlines


The Gilt Comes Off: Singapore Goes Into Lockdown

A clean, technology driven dystopia. A representation of our techno future. These were the introductory descriptions to a piece by science fiction author William Gibson on Singapore for Wired in 1993. “Imagine an Asian version of Zurich operating as ... More>>

Ian Powell: Pay Freezes, Health Systems And Medical Specialists

What has a pay freeze got to do with a universal public health system? Actually quite a lot. Health systems, especially public hospitals which handle the more complex and urgent cases that the rest of the system can’t fix, are by their very nature ... More>>

Forgetting Citizenship: Australia Suspends Flights From India

As India is being devastated by COVID-19 cases that have now passed a daily rate of 400,000, affluent and callous Australia has taken the decision to suspend all flights coming into the country till mid-month. The decision was reached by the Morrison ... More>>

Keith Rankin: The New Zealand Government’s 'Public Finance Rabbithole'

Last week, out of left field, the government placed a three-year embargo on normal public sector wage bargaining, essentially a salary freeze. While there has been a certain amount of backtracking since, it is clear that the government has been ... More>>

The Conversation: Without The Right Financial Strategies, NZ’s Climate Change Efforts Will Remain Unfinished Business

When it comes to climate change, money talks. Climate finance is critical for enabling a low-emissions transition. This involves investment and expenditure — public, private, domestic and transnational — that demonstrably contributes to climate ... More>>

Dr Terrence Loomis: Does Petroleum Industry Spying Really Matter?

Opinion: Nicky Hager’s latest revelations about security firm Thompson and Clark’s ‘spying’ on climate activists and environmental organisations on behalf of the oil and gas industry and big GHG emitters makes entertaining reading. But it does ... More>>