NZ Dollar Outlook: Kiwi to rise on Spain rescue; RBNZ looms 11 Jun 2012
- CORRECT: China lifts temporary ban on Fonterra whey products Business
- Solid Energy annual losses mount with another $110.6 mln in Business
- Update: China lifts temporary ban on Fonterra whey products Business
- MARKET CLOSE: NZX 50 rises to a record; led by Ebos Business
- China lifts ban on Fonterra whey powders Business
- NZ dollar heads for 0.5% gain in October Business
- Xero 3Q cash burn slows as customer receipts rise 19% Business
- Heartland affirms FY guidance Business
- Air NZ, PT Garuda Indonesia win Australian cartel case Business
- Ebos 1Q trading up 10%, new CEO Davies says Business
NZ Dollar Outlook: Kiwi may rise on Spanish rescue as RBNZ looms
By Hannah Lynch
June 11 (BusinessDesk) - The New Zealand dollar may finish the week higher as markets digest a 100 billion euro rescue package for Spain's banks and the Reserve Banks review the official cash rate on Thursday.
The New Zealand dollar recently traded at 77.63 US cents, up from 77.53 cents at 8am and 76.97 cents at the close of trading in New York on Friday. That's right in the middle of this week's predicted trading range of 76.50 cents to 78.50, according to a BusinessDesk survey of five analysts.
Four out of the five analysts surveyed said the kiwi will finish the week higher, while one said it will finish the week lower.
Spain will become the fourth euro-zone nation to receive a financial bailout after European Union finance ministers agreed to shore up the nation's banking sector following an emergency conference call over the weekend. Leaders didn't make clear whether the loans would come from the region's permanent support fund, the European Stability Mechanism or its temporary European Financial Stability Fund. The EU and IMF have now committed half a trillion euros in euro-zone bailouts.
"It is simply another measure to stop the crisis spreading to other counties," said Peter Cavanaugh, senior client adviser at Bancorp. "The government is doing okay but the burden of the banks bailout would be too much."
Spain's aid comes a week before Greece's second round of elections on June 17. The result will be closely watched by markets in the event voters deiced to elect a government that decides to leave the region's shared currency.
"It will be the global pictures that will continue to determine the kiwi's direction," said Mike Jones, market strategist at Bank of New Zealand. "We will see focus quickly shift back to Greece - the elections will be pretty tough to call so the New Zealand dollar will be tossed around on global whims."
Germany, the Netherlands, Austria and Italy are preparing to sell bonds this week. The Netherlands will sell up to 2.5 billion euros of 2033 bonds on Tuesday, while Germany is set to offer 5 billion euros of 2022 bonds on Wednesday.
In New Zealand traders have pared their bets that the Reserve Bank will follow Australia in cutting interest rates at Governor Alan Bollard's quarterly Monetary Policy Statement review on Thursday. A tepid local recovery and global risks, especially in Europe are likely to keep the official cash rate unchanged at 2.5 percent, according to all 14 economists in a Reuters survey.
"A dovish statement consolidated with no signal to cut rates will cause a fall in interest rates and the kiwi," said Imre Speizer, market strategist at Westpac Banking Corp.
Reserve Bank of Australia Governor Glenn Stevens cut the target cash rate by 25 basis points to 3.5 percent, last week. That's the smallest gap between the Trans-Tasman benchmark rates since November 2009.
In China, New Zealand's second largest export market, the People's Bank of China unexpectedly cut interest rates to 0.25 percent on Friday to help stimulate its economy, while European Central Bank and Bank of England policy makers kept rates unchanged.
The New Zealand dollar increased to 61.61 yen from 61.16 yen at the close of trading in New York on Friday as the Bank of Japan also prepares to meet this week. The BOJ is not expected to announce any new initiatives after its left asset-purchases unchanged at its May meeting. The central bank now regards asset purchases as its key monetary easing tool.
In the world's largest economy, the US, there is a raft of data set for release this week, with producer prices and retail sales due out on Wednesday, followed by the consumer price index and initial weekly jobless claims on Thursday.
New Zealand's accommodation survey for April and electronic card transactions for May are scheduled for release on Tuesday followed by the food price index on Thursday from Statistics New Zealand. The ANZ Roy Morgan Consumer Confidence survey will be released on Friday.
29 Oct 2014 News
New Zealand Government Rt Hon John KeyPrime Minister Hon Bill EnglishDeputy Prime Minister 29 October 2014 Cabinet has agreed on the... more
28 Oct 2014 Business News
By Paul McBeth Oct. 28 (BusinessDesk) - The New Zealand dollar held gains in the local trading session as traders remain cautious... more
28 Oct 2014 Business News
By Fiona Rotherham Oct. 28 (BusinessDesk) - Orion Health Group, which develops software systems for patient health management, wants... more
29 Oct 2014 Food & Wine
Neena and Belinda have won the first season of My Kitchen Rules New Zealand. The "Modern Day Hippies" beat Aaron and Heather in... more
28 Oct 2014 Property
By Suze Metherell Oct. 28 (BusinessDesk) - Goodman Property Trust, the biggest listed property investor by market value, sold two... more
24 Oct 2014 Migration
New Zealand has been named the best place to raise a child in the Raising Children Abroad annual league table. According to the HSBC... more
24 Oct 2014 Travel & Tourism
Giving flyers an Unexpected Journey! Elijah Wood and Sir Peter Jackson star in 'epic' Hobbit themed Air New Zealand safety video Air... more
29 Oct 2014 Rugby League
Vodafone Warriors prop Suaia Matagi is poised to play his first test for the NZ Kiwis against his old team-mates, Toa Samoa, at... more
28 Oct 2014 Cricket
ICC Cricket World Cup 2015 Cancer Society named official charity in New Zealand for ICC Cricket World Cup 2015 The Cancer Society has... more
28 Oct 2014 Opinion
Article - Adam Parsons The return of Occupy London: this time it’s truly political by Adam Parsons22 October 2014
28 Oct 2014 Column
Column - Gordon Campbell Gordon Campbell on the TPP finishing line, and Amazon’s woes by Gordon Campbell If the Trans Pa... more
28 Oct 2014 Appointments
Minister of Foreign Affairs Foreign Minister Murray McCully has appointed diplomat James Kember as New Zealand’s next... more
28 Oct 2014 Recruitment
Social Development Minister Anne Tolley says the Government’s 3K to Christchurch scheme is a winner with 633 unemployed people... more