NZ Dollar Outlook: Kiwi to rise on Spain rescue; RBNZ looms 11 Jun 2012
- NZ Refining posts 1H loss in face of shrinking margins Business
- UPDATED: Small NZ forest owners targeted Business
- MARKET CLOSE: NZ shares rise on results; Port of Tauranga up Business
- Croxley calls time on NZ production in face of cheap imports Business
- NZ dollar falls as economy seen settling to more modest pace Business
- Australian, China-backed company targets NZ forest owners Business
- NZ meat industry tie-up stumbled on differing strategies Business
- NZ consumer confidence sinks to 10-month low Business
- UPDATE: Skellerup stock falls as earnings miss forecasts Business
- Port of Tauranga posts 1.3% gain in FY profit as logs rise 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.
20 Aug 2014 News
The son of the Maori King will be back before the court next week. Last month, Korotangi Paki, 19, was let off charges of burglary,... more
20 Aug 2014 Business News
By Tina Morrison Aug. 20 (BusinessDesk) - Airways Corp. of New Zealand expects to boost profit 27 percent this year, after missing... more
20 Aug 2014 Business News
By Paul McBeth Aug. 20 (BusinessDesk) - Landcorp Farming, the state-owned commercial farmer, slashed guidance for 2015 earnings... more
20 Aug 2014 Entertainment
Adventurer, management consultant and motivational speaker Jamie Fitzgerald will receive a Distinguished Alumni Award from the... more
14 Aug 2014 Property
New Zealand house sales fell in July as winter cooled the appetite of house hunters while a drop in properties selling for $400,000... more
7 Aug 2014 Property
Aug. 7 (BusinessDesk) - New Zealand property values rose at the slowest annual pace in 13 months in July as rising interest rates,... more
20 Aug 2014 Migration
Statistics NZ puts out detailed data on different ethnic groups, down to the 108 people from the Isle of Man. Did you know there are... more
19 Aug 2014 Travel & Tourism
Auckland has again been ranked the tenth most liveable city in the world. The Economist Intelligence Unit (EIU) has released its... more
20 Aug 2014 Rugby League
This year's Rugby League Four Nations will provide the catalyst for five New Zealand representative sides - not just the NZ Kiwis -... more
20 Aug 2014 Sport
From Glasgow to Auckland is the well-travelled route taken by Australian Greg Warnecke, announced today as the General... more
19 Aug 2014 Opinion
Opinion - Martin Doyle Martin Doyle Cartoon: Doing Justice to the Election Given the dirty politics that have been exposed in... more
20 Aug 2014 People
We're expecting big things from Harman Grubisa, the new label from Auckland-based friends Madeleine Harman (right) and Jessica... more
19 Aug 2014 Recruitment
New Zealand is on track to Budget surplus this year, backed by good growth, more jobs and higher incomes under the ... more