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

PM saddened at passing of Dame Thea Muldoon

25 Feb 2015 News
PM saddened at passing of Dame Thea Muldoon Prime Minister John Key today expressed his sadness at the passing of Dame Thea ... more

Bill to fight child exploitation passes second reading

25 Feb 2015 News
  A Bill to better protect children from sexual exploitation passed its second reading in Parliament last night.   The... more

Business

MARKET CLOSE: NZX 50 rises to record, led by Xero

25 Feb 2015 Business News
By Suze Metherell Feb. 25 (BusinessDesk) - New Zealand shares rose to a record, led by Xero after it raised $147 million from two... more

Tourism Holdings beats 1H guidance on reduced fleet

25 Feb 2015 Business News
Article - BusinessDesk   Tourism Holdings beats 1H guidance on reduced fleet, wider margins By Suze Metherell Feb. 25 ... more

Living

A little drive goes a long way

25 Feb 2015 Lifestyle
Dunedin businesses have given their full support to the Otago Polytechnic Education Open 2015. The event will be taking place at... more

Duke Kahanamoku – 100 years of Surfing in New Zealand

25 Feb 2015 Lifestyle
Surfbreak Protection Society Duke Kahanamoku – 100 years of Surfing in New Zealand Celebrations are to be held in New Brighton... more

Property

Auckland inner-city height restrictions weighing on supply

25 Feb 2015 Property By Paul McBeth
Auckland inner-city height restrictions weighing on supply, RBNZ's Wheeler says Feb. 25 (BusinessDesk) - New Zealand's government... more

NZ house sales rise 2.6% in January, median price dips from December

11 Feb 2015 Property
Article - BusinessDesk Feb. 11 (BusinessDesk) - New Zealand residential property sales rose in January from the same month last... more

Migration

NZ migration rose to record in 2014

30 Jan 2015 Migration By Tina Morrison
  NZ migration surged to record in 2014, helped by robust economy Jan. 30 (BusinessDesk) - New Zealand migration surged to a... more

Free new Kiwi workshops return for fresh season

23 Jan 2015 Migration
Newcomer settlement support agency Auckland Regional Migrant Services (ARMS) is kick-starting the New Year with the return of its ... more

Travel

Air NZ sees fare discounts; yield pressure looms

25 Feb 2015 Travel & Tourism
By Fiona Rotherham Feb. 25 (BusinessDesk) - The only cloud on Air New Zealand’s horizon in coming months will be yield ... more

Air NZ posts higher normalised earnings

25 Feb 2015 Travel & Tourism
Article - BusinessDesk   Air NZ posts higher normalised earnings By Fiona Rotherham Feb. 25 (BusinessDesk) - Air New Zealand... more

Sport

2015 NZL Sailing Team Announced

25 Feb 2015 Sailing
Yachting New Zealand has named 15 campaigns in the 2015 NZL Sailing Team. All are chasing the ultimate goal of Olympic glory in... more

All Blacks Tours to South Africa on sale now

25 Feb 2015 Rugby
The All Blacks are set to return to South Africa this July to take on the Springboks at Ellis Park in Johannesburg. This will be the... more

Columns

Gordon Campbell: Are NZ troops the least of IS’s problems?

25 Feb 2015 Opinion By Gordon Campbell
Gordon Campbell on whether New Zealand troops are the least of Islamic State’s problems   Given that it has been ... more

Gordon Campbell on drip-fed info about the Iraq deployment

24 Feb 2015 Opinion By Gordon Campbell
Gordon Campbell on the drip-feeding of information about the Iraq deployment   There are two ways of framing the story of our... more

Kiwi Success

New Consul-General to Sydney

20 Feb 2015 Appointments
Foreign Minister Murray McCully has named diplomat Billie Moore as New Zealand’s new Consul-General in Sydney. "Ms Moore will... more

New Ambassador to Ethiopia and the AU

20 Feb 2015 Appointments
New Zealand Government New Ambassador to Ethiopia and the AU Foreign Minister Murray McCully has named diplomat Bruce Shepherd as ... more

Recruitment

Workforce skills target lifted

19 Feb 2015 Recruitment
Tertiary Education, Skills and Employment Minister Steven Joyce says better-than-expected Better Public Services results mean the ... more

Strong job growth and record labour market participation

4 Feb 2015 Recruitment
The latest labour market data shows continuing strong employment growth with 80,000 more jobs added to the New Zealand economy in ... more