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

$96.5 million for new science research programmes

3 Sep 2015 News
Science and Innovation Minister Steven Joyce has today announced funding for 48 new science research programmes, for a total... more

10 year passports will be delivered early

24 Aug 2015 News
10 year passports will be delivered early Internal Affairs Minister Peter Dunne today welcomed the Government Administration Select ... more

Business

CORRECT: Government, Auckland iwi reach agreement

3 Sep 2015 Business News By Fiona Rotherham
  CORRECT: Government, iwi reach agreement for private housing on Crown land in Auckland (Removes reference to selling land in... more

Air NZ to defend US class action over air cargo cartel claim

3 Sep 2015 Business News By Paul McBeth
  Sept. 3 (BusinessDesk) - Air New Zealand, the national carrier, will defend a multi-billion dollar class action in the US... more

Living

It’s Snoopy’s Birthday!

10 Aug 2015 Entertainment
20th Century Fox is celebrating Snoopy’s birthday ahead of the release of the first animated Peanuts movie SNOOPY AND CHARLIE... more

NZ's Sola Rosa Sound System heads to London - interview with Andrew Spraggon

6 Aug 2015 Entertainment By Charlotte Everett
Sola Rosa Sound System comes to London on 20 August – NZNewsUK London Editor Charlotte Everett had a chat with frontman Andrew... more

Property

Auckland house sales climb to 15-yr high for month of August

3 Sep 2015 Property By Paul McBeth
Article - BusinessDesk   Auckland house sales climb to 15-year high for month of August, prices stall Sept. 3 (BusinessDesk) -... more

Auckland house price growth stalls in July: Barfoot

5 Aug 2015 Property By Tina Morrison
  Auckland house price growth stalls in July as properties 'fully priced', Barfoot says Aug. 5 (BusinessDesk) - Auckland house... more

Migration

NZ net migration reaches new annual record in June

21 Jul 2015 Migration By Paul McBeth
  NZ net migration reaches new annual record in June, swelled by Indian, Chinese students July 21 (BusinessDesk) - New Zealand... more

NZ migration rises to new annual record in May

22 Jun 2015 Migration By Suze Metherell
  NZ migration rises to new annual record in May, closing in on Treasury's upside scenario June 22 (BusinessDesk) - New Zealand... more

Travel

Air NZ to continue alliance with Cathay Pacific

25 Aug 2015 Travel & Tourism By Joshua Riddiford
Air NZ to continue alliance with Cathay Pacific, targets Asian tourists Aug. 25 (BusinessDesk) - Air New Zealand's has had its... more

Partnerships push New Zealand’s profile abroad

25 Aug 2015 NZ Tourism
25 August 2015 Campaigns promoting New Zealand as an outstanding visitor destination reached more than 1.2 billion people globally... more

Sport

NZ Rowing: Kiwi crews book A finals

3 Sep 2015 Sport
3 Sept 2015 Emotions ran high on an action packed day four at the 2015 World Rowing Championships with eight New Zealand crews taking... more

Silver Ferns to take on world’s best!

3 Sep 2015 Netball
Netball’s greatest rivalry will take centre stage in October when the Silver Ferns host the world champion Australian Diamonds... more

Columns

Gordon Campbell on the flag campaign

25 Aug 2015 Opinion
Gordon Campbell on the flag campaign So far, the public has treated the government’s flag campaign with something between... more

Gordon Campbell on Donald Trump, and Dr Dre

19 Aug 2015 Opinion
Gordon Campbell on Donald Trump, and Dr Dre   For the past few months, you, me, and Rupert Murdoch have been waiting for the... more

Kiwi Success

Library and Information Advisory Commission Appointments

3 Sep 2015 Appointments
Library and Information Advisory Commission Appointments Internal Affairs Minister Peter Dunne today announced three new... more

Former cricketer Simon Doull signs with NZME

19 Aug 2015 Appointments
Former cricketer and established broadcaster Simon Doull signs with NZME 19 August 2015 – New Zealand Media and Entertainment... more

Recruitment

Eleven straight quarters of job growth

5 Aug 2015 Recruitment
The latest labour market data shows continued job growth, with 7,000 more people employed over the last quarter and 69,000 more New ... more

NZ unemployment rate rises to 5.9% on weaker jobs growth

5 Aug 2015 Recruitment By Paul McBeth
NZ unemployment rate rises to 5.9% as jobs growth lags behind growing population Aug. 5 (BusinessDesk) - New Zealand's jobless rate... more