NZ Dollar Outlook: Kiwi to rise on Spain rescue; RBNZ looms 11 Jun 2012
- NZ dollar heads for 0.9% weekly drop Business
- Dorchester closes oversubscribed $30M capital raise Business
- NZX says it doesn't know why shares have declined Business
- Sky TV to launch $20/month subscription ondemand service Business
- Cavalier shares drop 10% after profit warning Business
- MARKET CLOSE: NZX 50 rises to record, led by Sky TV on rugby Business
- Sky TV sees annual profit gain of up to 8.6% in 2015 Business
- Heartland NZ chief risk officer resigns Business
- DNZ revalues portfolio by $10.7 million Business
- DNZ revalues portfolio up by $10.7 million 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.
24 Oct 2014 News
Ottawa resident says shock turning to anger and hard questions being asked about how gunman got so far. A New Zealander in Ottawa was... more
24 Oct 2014 Business News
By Fiona Rotherham Oct. 24 (BusinessDesk) - Sky Network Television, the country's dominant pay-TV operator, will launch a new $20 a... more
24 Oct 2014 Food & Wine
Fresh from two consecutive MKR People's Choice Challenge wins, Neena and Belinda favour wholesome and earthy flavours and aim to... more
24 Oct 2014 Lifestyle
New Zealand comedians Guy Montgomery (Billy T winner, 7 Days) and Tim Batt (Radio Hauraki, 7 Days) have broken the world record... more
24 Oct 2014 Property
Aucklanders living in the ‘hottest suburbs’ could be the big losers, while businesses will come out winners Rate rises... more
15 Oct 2014 Property
The Resource Management Act needs to explicitly recognise the importance of New Zealanders’ access to more affordable housing... 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
25 Oct 2014 Sport
The Black Sticks Women have won 1-0 against the USA, setting up a series decider in the final test tomorrow at the Trust House... more
24 Oct 2014 Rugby
Scotland coach Vern Cotter clears out old guard and makes Grant Gilchrist captain for November Test series No place for Barclay,... more
24 Oct 2014 Opinion
After all the delays and stonewalling, the St James finally looks to have a future, even if it’s not clear what it will be Let's... more
23 Oct 2014 Opinion
Gordon Campbell on the tokenism of New Zealand‘s role against Islamic State Was John Key born lucky or what? Political... more
24 Oct 2014 People
Veteran weathercaster Jim Hickey has announced his retirement today, saying is was a tough decision. "I feel like I'm subbing off at... more
24 Oct 2014 Recruitment
New Zealand paramedics are being poached by Britain's busiest ambulance service. Interviews were held in Auckland on Friday and... more