Sharechat Logo

NZ dollar nears record vs. A$ as retail sales beat expectations

Monday 16th February 2015

Text too small?

The New Zealand dollar rose against its Australian counterpart as retail sales beat expectations, reinforcing the view that the economic tide is in New Zealand's favour compared to that of its nearest neighbour.

The kiwi climbed as high as 96.48 Australian cents, and was trading at 96.34 cents at 5pm in Wellington from 95.92 cents on Friday in New York. It gained to 75.07 US cents at 5pm from 74.50 cents at 8am and 74.52 cents last week.

New Zealand government figures showed retail sales rose 1.7 percent in the final three months of the year, beating estimates for a 1.3 percent gain. The data reinforce growing momentum in local consumer spending as the labour market picks up and low credit costs spur demand. Upbeat consumer sentiment is one of several reasons Reserve Bank governor Graeme Wheeler has decided to keep the official cash rate at 3.5 percent for the time being, while a slowing economy across the Tasman has seen Australia's central bank cut rates this month to a record-low 2.25 percent.

"The news out of Australian is not good, while out of New Zealand it's okay to good," said Imre Speizer, market strategist at Westpac Banking Corp in Auckland. The kiwi/Australian dollar cross-rate "has got some pretty strong momentum at the moment."

Westpac's Speizer said the kiwi dollar could test the record 96.52 Australian cents it reached last month, though may struggle to break higher.

The next major event for the kiwi dollar is the GlobalDairyTrade auction on Tuesday in the US, which investors are monitoring after a strong gain in whole milk powder prices at the last auction a fortnight ago, followed by the Wednesday release in in Washington of minutes to the Federal Open Market Committee's last policy meeting, Speizer said.

The kiwi advanced to 88.90 yen at 5pm in Wellington from 88.47 yen on Friday in New York after data showed Japan's gross domestic product grew at an annualised 2.2 percent pace in the three months ended Dec. 31, missing the 3.6 percent expected by economists.

The local currency increased to 65.73 euro cents from 65.44 cents last week, and rose to 48.65 British pence from 48.38 pence. It gained to 4.6901 Chinese yuan from 4.6500 yuan last week. The trade-weighted index climbed to 77.74 from 77.16 on Friday in New York.

The two-year swap rate rose to 3.5525 at 5pm in Wellington from 3.54 on Friday, and the 10-year swap rate increased to 3.735 from 3.73.

 

 

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report