Sharechat Logo

NZ dollar holds at 77 US cents after Christchurch earthquakes

Friday 23rd December 2011

Text too small?

The New Zealand dollar held steady on 77 US cents following a 5.8 magnitude earthquake in Christchurch at 1.58pm this afternoon.

The kiwi fell to 77.49 at 4pm, from 77.51 US cents at 1.58pm. This was up from 77.36 US cents at 9am and 76.78 US cents at 5pm yesterday.

The earthquake cut power and phone services to the central city and was 8km deep, centered 20km north east of Lyttelton. It was followed by a second jolt moments later, and several aftershocks have also been recorded, including another major shake at 3.19 p.m.

The quakes immediately sparked speculation that the Reserve Bank of New Zealand would cut the Official Cash Rate because of the implied delay to Christchurch rebuilding effort.

Christian Hawkesby, at Harbour Asset Management in Wellington, said that was unlikely.

However, the latest quakes would make the central bank even less likely than before to raise interest rates.

The RBNZ’s last monetary policy statement, early this month, made clear there was no case for lowering interest rates even if the global economy worsened significantly, and further quakes in Christchurch could be seen as a similarly jarring event for the local economy.

“Our initial view…is that it delays the RBNZ going into hiking rates,” he said. “The Reserve Bank will sit on its hands,” Hawkesby said.

The kiwi rose to 60.47 yen from 59.9 yen yesterday, and 49.35 British Pence from 49.01 British pence. It advanced to 76.11 Australian cents from 76.1 cents and was up 59.27 euro cents from 58.8 cents yesterday.

The trade-weighted index was little changes at 69.16 from 5pm yesterday.

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:

NZ dollar gains on G20 preference for growth
NZ dollar dips as Wellington CBD checked for quake damage
NZ dollar gains, bolstered by RBA minutes, strong dairy prices
NZ dollar falls after central bank says it may scale up currency intervention
NZ dollar gains before CPI, helped by dairy gains, rally on Wall Street
NZ dollar trades little changed as US budget talks bear down on deadline
NZ dollar falls with equities on view US to sail over fiscal cliff
NZ dollar weakens as fiscal cliff looms, long bets unwind
NZ dollar sinks to three-week low as equities fall, fiscal talks in focus
NZ dollar slips as fiscal cliff talks grind slower in Washington