NZ Dollar Outlook: Kiwi to rise on Spain rescue; RBNZ looms 11 Jun 2012
- KiwiRail 1H earnings fall on lower coal, logs, dairy volumes Business
- Govt resisting pressure to pump more cash into Solid Energy Business
- MARKET CLOSE: NZX 50 rises to record; MRP, Meridian climb Business
- NZ dollar falls on concerns over China, Australia economies Business
- Vista reassesses whether to increase 2014 goodwill value Business
- Blue Chip’s Bryers won’t return to New Zealand, court hears Business
- TVNZ 1st-half profit drops 5% on weaker ad revenue Business
- UPDATE: PayPal stops processing Mega payments Business
- Phillips Fox merges with DLA Piper Business
- NZ Dollar Outlook: Kiwi at mercy of overseas moves this week 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.
1 Mar 2015 News
TVNZ Q + A 2015 Episode 1 WINSTON PETERS Interviewed by CORIN DANN CORIN Mr Peters joins me now. Good morning to you.<... more
2 Mar 2015 Business News
Phillips Fox merges with DLA Piper to become local unit of Anglo-American law firm March 2 (BusinessDesk) - Phillips Fox has... more
27 Feb 2015 Entertainment
Creator Sylvia Anderson to Feature in Special Thunderbirds Are Go Episode And Lady Penelope, Parker And Brains Pictures Are... more
27 Feb 2015 Property
NZ building consents fall for a second month in January, housing permits drop Feb. 27 (BusinessDesk) - New Zealand... more
25 Feb 2015 Property
Auckland inner-city height restrictions weighing on supply, RBNZ's Wheeler says Feb. 25 (BusinessDesk) - New Zealand's government... more
30 Jan 2015 Migration
NZ migration surged to record in 2014, helped by robust economy Jan. 30 (BusinessDesk) - New Zealand migration surged to a... more
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
2 Mar 2015 Netball
Following their opening round away win, the Kia Magic are looking forward to playing in front of a home crowd in Tauranga next... more
1 Mar 2015 Cricket
Win shows why Brendon McCullum’s men can be considered among the top contenders for the World Cup but there are lessons to learn... more
2 Mar 2015 Opinion
Gordon Campbell on the recent smackdown over Greece, and Mr Spock RIP There had been a fortnight of fevered buildup. Yet here... more
27 Feb 2015 Opinion
Gordon Campbell on the wage hike for MPs, and Paul Robeson Hard to tell what is more infuriating. Is it the 5.3% increase on... more
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
19 Feb 2015 Recruitment
Tertiary Education, Skills and Employment Minister Steven Joyce says better-than-expected Better Public Services results mean the ... more
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