NZ dollar may decline in 3Q, prompting importers to hedge 10 Jul 2014
Related articles
- NZ consumers grow more upbeat, may resume spending Business
- Knowles quits as CEO of KiwiBank Business
- NZ migration bolstered by British invasion Migration
- NZ manufacturing activity reaches highest since 04 Business
- NZ dollar hits 22-month high vs euro Business
- OceanaGold finds new gold deposits at Fraser mine Business
- Transpower gets go-ahead for $170m SI upgrade Business
- NZ home sales creep up in March, still subdued Property
- NZ economy expands at fastest pace in two years Business
- New Zealand food prices fall in February Business
NZ dollar may decline in third quarter, prompting importers to hedge ahead of Christmas
By Tina Morrison
July 10 (BusinessDesk) - The New Zealand dollar may weaken in the third quarter, prompting importers to buy the currency while it is hovering near record highs as they gear up for Christmas, their busiest season.
The kiwi, which today touched a fresh three-year high of 88.29 US cents, may slip to 85 cents by the end of September as higher local interest rates are offset by a strengthening US economy, according to the median forecast in a BusinessDesk survey of 18 currency traders and strategists.
For New Zealand retailers, a high local currency has been a benefit, enabling them to buy overseas merchandise at a lower cost which they can either pass on to consumers in the form of cheaper prices or retain to boost their margins and profits. Still, with the currency likely to decline from elevated levels, retailers such as Briscoe Group will be looking to lock in their currency rates at high levels so they have the best buying power possible heading into the busy Christmas season.
"We are a real beneficiary some days and get hurt other days by currency but certainly right now there are pretty bright sunny days at the moment with the currency where it is - it does give us some benefit but also it gives us the flexibility to sell some pretty nice merchandise at some pretty cheap prices as well," said Briscoe managing director Rod Duke, who says he has locked in options to buy the currency at favourable levels heading into the last four months of his financial year though January, where he typically makes 40 percent of annual sales.
"We certainly have a relatively high protectionist view of the currency and so I am fairly well hedged with just a small percentage left over that I can spot buy on because the most important thing for me of course is that I last longer than my competitors at these sort of levels," Duke said.
Briscoe Group, which includes the Briscoes Homewear, Rebel Sports and Living & Giving chains, has the flexibility on its balance sheet with cash in the bank and no debt to be able to buy currency to secure good rates, he said.
The New Zealand dollar is close to its post-float high of 88.40 US cents touched in August 2011 as investors are lured to the nation's higher yields as local interest rates rise while rates in most other major economies remain at record lows. The local currency is predicted to decline in the third quarter as a revival in the US turns investor attention to when interest rates will start increasing in the world's largest economy.
Expectations for the New Zealand dollar at the end of the third quarter range from 81 US cents to 91.50 cents, according to the BusinessDesk survey taken this week.
The survey shows the trade-weighted index, which tracks the New Zealand currency against those of Australia, Japan, the US, the UK and the euro area, will likely fall to 80 from 81.89 currently. Expectations in the BusinessDesk survey range from 78 to 85. That compares with the Reserve Bank's expectation for the TWI to average 79.7 over the quarter, according to its latest forecast published June 12.
(BusinessDesk)
News
Hilary Timmins' Award-Winning UK Documentary Series To Inspire NZ Students
29 Jun 2020 Education
Dream Catchers, produced and directed by Hilary Timmins, celebrates the success stories of more than thirty inspirational New... more
New Zealand reaffirms support for Flight MH17 judicial process
7 Mar 2020 News
Ahead of the start of the criminal trial in the Netherlands on 9 March, Foreign Minister Winston Peters has reaffirmed the need to... more
Business
NZ Government's Economic package to fight COVID-19
17 Mar 2020 Business News
The Coalition Government has launched the most significant peace-time economic plan in modern New Zealand history to cushion the... more
NZ Government announces aviation relief package
19 Mar 2020 Business News
Transport Minister Phil Twyford today outlined the first tranche of the $600 million aviation sector relief package announced earlier... more
Living
Diversity was Key at New Zealand Trade Tasting in London
6 Jun 2022 Food & Wine
New Zealand Winegrowers Annual Trade Tasting was recently held in London, on Wednesday 4 May, in Lindley Hall.
It was the first... more
Kiwi author stuns Behind the Butterfly Gate
12 Jan 2022 Arts
Hidden behind the Butterfly Gate is where the secret has been kept for 76 years...
New Zealand writer Merryn Corcoran’s... more
Property
Fairer rules for tenants and landlords
17 Nov 2019 Property
17 NOVEMBER 2019
The Government has delivered on its promise to the over one million New Zealanders who now rent to make it fairer... more
New Zealand Government will not implement a Capital Gains Tax
17 Apr 2019 Property
The Coalition Government will not proceed with the Tax Working Group’s recommendation for a capital gains tax, Jacinda Ardern... more
Migration
Boosting border security with electronic travel authority – now over 500,000 issued
19 Nov 2019 Migration
19 NOVEMBER 2019
We’ve improved border security with the NZeTA, New Zealand Electronic Travel Authority, which helps us to... more
Christchurch reinstated as refugee settlement location
18 Aug 2018 Migration
18 AUGUST 2018
HON IAIN LEES-GALLOWAY
The announcement that Christchurch can once again be a settlement location for refugees... more
Travel
Gallipoli Anzac Day services cancelled
19 Mar 2020 Travel & Tourism
The New Zealand and Australian Governments have announced this year’s joint Anzac Day services at Gallipoli will be cancelled... more
New Zealanders advised not to travel overseas
19 Mar 2020 Travel & Tourism
New Zealanders advised not to travel overseas
more
Sport
The Skipper's Diary: Sir Richard Hadlee honouring his father and NZ's Forty-Niners
27 Oct 2019 Cricket
NZNewsUK London Editor Charlotte Everett spoke to Sir Richard Hadlee about why he’s chosen to publish his father’s... more
PREVIEW: All Blacks v England semi-final
26 Oct 2019 Rugby
The two most convincing quarterfinals winners are set to square off in a semifinal showdown for the ages when the All Blacks meet old... more
Columns
Gordon Campbell on the Gareth Morgan crusade
11 Nov 2016 Opinion
Gordon Campbell on the Gareth Morgan crusade
First published on Werewolf
The ghastly likes of Marine Le Pen in France and Geert ... more
Gordon Campbell on the US election outcome
10 Nov 2016 Opinion
Column - Gordon Campbell
Gordon Campbell on the US election outcome
Well um.. on the bright side, there (probably)... more
Kiwi Success
Congratulations to Loder Cup winner
26 Sep 2018 People
25 SEPTEMBER 2018
The Loder Cup, one of New Zealand’s oldest conservation awards, has been awarded to Robert McGowan for 2018... more
Appointments to New Zealand National Commission for UNESCO
16 Aug 2018 Appointments
16 AUGUST 2018Appointments to New Zealand National Commission for UNESCO
HON JENNY SALESA
Associate Education Minister Jenny Salesa is... more
Recruitment
Historic pay equity settlement for education support workers
14 Aug 2018 Recruitment
14 AUGUST 2018Historic pay equity settlement for education support workers
RT HON JACINDA ARDERN
HON CHRIS HIPKINS
Prime Minister
The... more
Historic pay equity settlement for education support workers
22 Aug 2018 Recruitment
14 AUGUST 2018Historic pay equity settlement for education support workers
RT HON JACINDA ARDERN
HON CHRIS HIPKINS
Prime Minister
The... more