NZ dollar falls as Aussie inflation rises more than expected   27 Jan 2016

Article - BusinessDesk

NZ dollar falls vs. Aussie as Australian inflation beats expectations; Fed, RBNZ loom

By Paul McBeth

Jan. 27 (BusinessDesk) - The New Zealand dollar fell against its trans-Tasman counterpart after Australian inflation came in higher than expectations, eroding the chances of another rate cut in Australia.

The kiwi dropped to 92.35 Australian cents at 5pm in Wellington from 92.88 cents immediately before the inflation data, and 92.79 cents yesterday. The local currency traded at 64.74 US cents from 64.99 cents at 8am, and 64.56 cents yesterday.

Bureau of Statistics data showed Australian consumer prices rose at an annual pace of 1.7 percent in the December quarter, more than the 1.6 percent pace predicted. That saw Australia's dollar rally as traders reduced their bets for another rate cut and pushed the kiwi down against its trans-Tasman counterpart. Investors will be watching the policy reviews from the Federal Reserve and Reserve Bank of New Zealand tomorrow.

"The real action was the Aussie CPI (consumer price index) which was stronger than expected - they do have a bit of inflation there," said Sam Tuck, senior foreign exchange strategist at ANZ Bank New Zealand in Auckland. "Those factors drove the kiwi/Aussie lower."

The kiwi had been part of a rally in commodity-linked currencies during the Northern Hemisphere trading session amid speculation oil producers may scale back supply to deflate the current global glut, though a drop in Chinese equity markets and the currency's decline against the Aussie eroded those gains in the local session.

Both the Fed and RBNZ aren't expected to make any policy moves tomorrow, but investors will be watching for any comment on inflation, which is being dragged down by cheap petrol and diesel.

The kiwi got a brief boost from Prime Minister John Key's state of the nation speech, where he announced plans to accelerate transport infrastructure spending in Auckland.

New Zealand's sovereign rating also had its outlook downgraded to stable by Fitch Ratings, which affirmed the nation's AA rating while projecting slower economic growth as dairy prices look set to weigh on the rural sector.

New Zealand's two-year swap rate increased one basis point to 2.64 percent at 5pm in Wellington, and 10-year swaps slipped three basis points to 3.42 percent.

The kiwi rose to 4.2609 Chinese yuan from 4.2469 yuan yesterday, and increased to 76.47 yen from 76.28 yen. It was little changed at 59.57 euro cents from 59.51 cents yesterday, and slipped to 45.15 British pence from 45.38 pence. The trade-weighted index was almost unchanged at 71.29 from 71.27.

(BusinessDesk)

Add a comment

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 By Rt HON WINSTON PETERS
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 By RT HON JACINDA ARDERN
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 By Hon Phil Twyford
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 By Charlotte Everett
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 By Minister Kris Faafoi
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 By RT HON JACINDA ARDERN
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 By Hon Iain Lees-Galloway
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 By RT HON JACINDA ARDERN
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 By Charlotte Everett
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 By Hon Eugenie Sage
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 By RT HON JACINDA ARDERN
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 By RT HON JACINDA ARDERN
14 AUGUST 2018Historic pay equity settlement for education support workers RT HON JACINDA ARDERN HON CHRIS HIPKINS Prime Minister The... more