NZ dollar climbs almost 1 US ct on hopes of Spanish bailout   7 Jun 2012

Article - BusinessDesk

NZ dollar climbs almost 1 US cent on hopes of Spanish bank bailout, EU stimulus

By Hannah Lynch

June 7 (BusinessDesk) - The New Zealand dollar rose almost one US cent on optimism European policymakers will act to stimulate the region’s economy and provide aid for Spanish banks while the Federal Reserve said the US continues to grow at a modest pace.

The New Zealand dollar increased to 76.98 US cents at 8am from 76.22 cents yesterday at 5pm. The trade weighted index rose to 69.99 from 69.48.

European Central Bank President Mario Draghi said policymakers were “ready to act” after the central bank left its benchmark rate at a record low 1 percent. The ECB also extended its lending to banks for up to three years, providing some hope for ailing Spanish lenders. In the US, the Federal Reserve said the world's largest economy maintained a moderate pace of growth as factory output rose and the real estate market improved.

"What has moved the kiwi is the hope in the market that there seems to some resolution in the Spanish situation," said Stuart Ive, currency strategist at HiFX. Optimism for an improvement in Europe “has had a big effect on New Zealand dollar sentiment.”

The ECB lowered its growth forecast to 1 percent in 2013 from 1.1 percent. Its forecast of a 0.1 percent economic contraction in the euro area this year was unchanged along with inflation at 2.4 percent for 2012 and 1.6 percent for 2013.

Fed policymakers will provide further insight on their views when vice chairmen Janet Yellen speaks in Boston and Chairman Ben Bernanke testifies to Congress on Thursday. The Beige Book also used language similar to its April report as the economy “continued to expand at a modest to moderate pace.”

Investors are looking for signs that a loss of momentum in US growth could warrant a third round of quantitative easing, or QE3.

The kiwi traded at 77.48 Australian cents at 8am up from 77.33 cents yesterday. That comes before New Zealand's biggest export market release its employment numbers this afternoon. The data will follow Australia's gross domestic product, which grew at more than twice the pace economists had predicted, expanding at 1.3 percent in the three months ended March 31.

"The Aussie employment numbers are wildly volatile," Ive said. "The New Zealand dollar will be dragged along with whatever happens with the Aussie data."

There is no significant data set for release in New Zealand today. The March quarter’s wholesale trade survey from Statistics New Zealand will be released tomorrow.

The New Zealand dollar was little changed on 61.25 euro cents from 60.93 cents and 49.68 British pence from 49.40 pence. The kiwi increased to 60.96 yen from 60.11 yen.

(BusinessDesk)

Add a comment

Bookmark and Share

News

New Zealand Budget 2017

25 May 2017 Politics
25 May 2017 Speech:  Hon Steven Joyce - Minister of FinanceMr Speaker I move that the Appropriation (2017/18 Estimates) Bill be... more

Christchurch Cathedral Working Group report released

29 May 2017 Canterbury Earthquake
26 May 2017 Minister supporting Greater Christchurch Regeneration Nicky Wagner is today releasing the Cathedral Working Group... more

Business

Rocket launch a huge step for New Zealand’s space industry

25 May 2017 Business News
25 May 2017 Minister for Economic Development Simon Bridges has congratulated the team at Rocket Lab on the successful launch of... more

Increased investor confidence welcomed

29 May 2017 Business News
29 May 2017 Commerce and Consumer Affairs Minister Jacqui Dean today welcomed the Financial Markets Authority annual survey results... more

Living

Spirit of “Mateship” prominent at London ANZAC commemorations

25 Apr 2017 ANZAC By Charlotte Everett
All photos copyright Peter Livingstone Photography. Lead image: HRH The Duke of York (far right), with the Hon Alexander Downer (far... more

3rd Position, Louis Vuitton America’s Cup World Series

21 Nov 2016 Lifestyle
Emirates Team New Zealand EMIRATES TEAM NEW ZEALAND CLOSES IN 3rd POSITION THE LOUIS VUITTON AMERICA’S CUP WORLD SERIES more

Property

New Zealand Housing Affordability Measure released

10 May 2017 Property
10 May 2017 The Ministry of Business, Innovation and Employment’s (MBIE) new Housing Affordability Measure will allow the market... more

NZ house prices gain 11% in October

14 Nov 2016 Property
Article - BusinessDesk Monday 14 November 2016 10:28 AM NZ house prices gain 11% in October, driven by sales of higher value homes By... more

Migration

Suspension of decision making authority

25 Apr 2017 Migration
24 April 2017Immigration Minister Michael Woodhouse is taking steps to improve Immigration New Zealand’s decision making... more

Recognised Seasonal Employers employ more Kiwis

8 Feb 2017 Migration
7 Feb 2017 Immigration Minister Michael Woodhouse welcomes a report showing the vast majority of employers who take on seasonal... more

Travel

International visitors projected to spend $15 billion

12 May 2017 Travel & Tourism
12 May 2017 New Zealand’s tourism sector is forecast to grow significantly over the next seven years, with international... more

Tourism spending continues rise in 2017

10 May 2017 Travel & Tourism
27 April 2017 Tourism spending by both international and domestic visitors continues to grow strongly in 2017, Acting Tourism Minister... more

Sport

Canada win has Black Ferns Sevens on track

29 May 2017 Rugby
LYNN MCCONNELL     29 MAY 2017     WORLD RUGBY New Zealand's Black Ferns beat home team Canada... more

Pressure on Lions from the outset

29 May 2017 Rugby
29 MAY 2017 Former British & Irish Lions and Ireland lock Paul O'Connell believes the 2017 tour kicking off in Whangarei on... more

Columns

Gordon Campbell on the Gareth Morgan crusade

11 Nov 2016 Opinion
Column - Gordon Campbell   Gordon Campbell on the Gareth Morgan crusade First published on Werewolf more

Gordon Campbell on the US election outcome

10 Nov 2016 Opinion
Column - Gordon Campbell   Gordon Campbell on the US election outcome more

Kiwi Success

Law Commissioner appointed

29 May 2017 Appointments
29 May 2017 Former Secretary for Justice Belinda Clark has been appointed as Law Commissioner, Justice Minister Amy Adams announced... more

Spencer to be Acting Governor of Reserve Bank

8 Feb 2017 Appointments
7 Feb 2017 Finance Minister Steven Joyce will appoint current Deputy Reserve Bank Governor Grant Spencer as the Acting Governor of... more

Recruitment

New employment resource for young people

1 Mar 2017 Recruitment
28 Feb 2017 Tertiary Education, Skills and Employment Minister Paul Goldsmith and Associate Education Minister Louise Upston have... more

Record number of people in employment

1 Feb 2017 Recruitment
1 Feb 2017 Tertiary Education, Skills and Employment Minister Paul Goldsmith has welcomed the record number of New Zealanders now in... more

s