Sharechat Logo

New Zealand dollar gains vs Aussie on weaker-than-expected Australian CPI

Wednesday 25th January 2017

Text too small?

 The New Zealand dollar gained strongly against the Australian dollar after fourth-quarter inflation was weaker than expected across the Tasman but was unchanged against the greenback as markets continued to adopt a wait-and-see attitude toward US President Donald Trump.

The kiwi rose to 96 Australian cents in Wellington from 95.50 cents late Tuesday, the highest in a month. The local currency was trading at 72.44 US cents as at 5pm from 72.39 cents at 8am and 72.44 cents late Tuesday.

Wednesday's data from the Australian Bureau of Statistics showed the consumer price index (CPI) rose 0.5 percent in the fourth quarter, from the previous quarter, missing forecasts of a 0.7 percent increase, Reuters reported. The annual pace did pick up to 1.5 percent, from 1.3 percent, but again undershot expectations.

"We have had a particularly strong day against the likes of the Australian dollar which under-performed on some slightly weaker than expected CPI numbers," said ANZ Bank New Zealand senior economist Philip Borkin.  “That helped drive the TWI up,” he said.

The strong kiwi/Aussie cross pushed the trade-weighted index to 79.18 from 78.96 yesterday. "That cross was the main driver today," said Borkin. He said it was difficult to envisage the kiwi falling much against the Australian dollar, at least in the short term. “I think things are certainly improving in Australia … but at this stage, New Zealand is still shining ahead."

Borkin said there were no major data overnight that might push the kiwi around although markets would continue to watch for any clarity from US President Donald Trump. He said the next major event for the kiwi is Thursday's domestic CPI data, where economists are expecting inflation to move back into the central bank's 1 percent to 3 percent target band for the first time in more than two years. 

New Zealand's two-year swap rate was unchanged at 2.37 percent, and 10-year swaps were up two basis points at 3.45 percent.

The kiwi rose to 4.9816 Chinese yuan from 4.9622 yuan. It rose to 67.50 euro cents from 67.29 cents Tuesday. It edged down to 57.80 British pence from 57.83 pence and rose to 82.27 yen from 81.60 yen Tuesday.

 

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