Sharechat Logo

NZ dollar gains in holiday trading as revisions show economy on stronger track

Thursday 21st December 2017

Text too small?

The New Zealand dollar gained after revised figures showed the economy on a stronger-than-expected growth track, adding to the prospects of a rate hike sooner than the Reserve Bank has flagged.

The kiwi rose to 70.07 US cents as at 5pm from 69.61 cents late yesterday. The trade-weighted index rose to 73.75 from 73.33.

While the 0.6 percent third-quarter growth was in line with expectations the second-quarter rate was revised up to 1 percent from 0.8 percent.

The "significant upward revisions to history are a deal-breaker for the markets," said Annette Beacher, chief Asia-Pac macro strategist for TD Securities.  The "upgrades to growth, low unemployment and forthcoming outsized fiscal spending all demand another hawkish tilt from RBNZ Governor Spencer," which supports the kiwi dollar.

Ross Weston, a senior trader at Kiwibank, said the market may have been expecting a poorer number and so it rallied on the news, in particular, the revisions. He noted, however, trading is very light and the GDP data was the last major event "before New Zealand shuts down for the holiday period."  While there will be little to push the kiwi around in the next few sessions, thin trading can increase volatility, he said. 

Looking ahead, he said some US data due at the end of the week will be closely watched for direction, including the third-quarter GDP revision, durable goods orders and the trimmed mean PCE inflation rate. 

The kiwi rose to 79.46 yen from 78.76 yen yesterday after the Bank of Japan kept monetary policy steady on Thursday despite growing signs of strength in the economy, signalling that it was in no rush to edge away from crisis-mode stimulus with inflation still distant from its 2 percent target.

It traded at  91.39 Australian cents from 90.89 cents yesterday and at 4.6018 Chinese yuan from 4.5903 yuan. It traded at 59.04  euro cents from 58.74 cents yesterday and rose to 52.42 British pence from 51.96 pence.

New Zealand’s two-year swap rate lifted 2 basis point to 2.19 percent and the 10-year swaps rose 4 basis points to 3.15 percent.

(BusinessDesk)

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond


  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 sags after avalanche of data and central bank action
Fonterra board starts planning chair succession
Fulton Hogan keeps Australian civil construction unit
Time for congestion pricing has come - NZIER
Colliers defends KiwiBuild as 'far from a colossal failure'
Pushpay shares rise as cost-cutting upgrades earnings guidance
20th September 2019 Morning Report
NZ dollar weaker against British pound on EC president's Brexit optimism
Todd plans Kapuni drilling campaign
MARKET CLOSE: NZ shares gain; appetite for KFC helps Restaurant Brands hit record

IRG See IRG research reports