Sharechat Logo

NZ dollar slips from year-high vs. Aussie as ratings agencies play down risk of hung parliament

Monday 4th July 2016

Text too small?

The New Zealand dollar slipped from a year-high against its trans-Tasman counterpart after ratings agencies downplayed the threat a hung parliament would have on Australia's triple-A credit rating. 

The kiwi traded at 95.83 Australian cents at 5pm in Wellington from 95.55 cents on Friday. It rose as high as 96.29 cents as investors weighed up the prospect of a hung parliament across the Tasman. The trade-weighted index was little changed at 76.65 from 76.63 last week. 

Both Moody's Investors Service and Fitch Ratings today said Australia's credit rating didn't face an immediate threat from the uncertain election result, and Standard & Poor's is scheduled to deliver its annual review on July 24. That helped allay investors' concerns about the election, and the Australian dollar recovered to be little changed at 74.84 US cents from 74.92 cents last week. The Reserve Bank of Australia will review policy tomorrow, and is expected to keep the target cash rate at 1.75 percent. 

"Fitch said the election upheaval is unlikely to affect the triple-A ratings of Australia," said Stuart Ive, senior dealer foreign exchange at OMF in Wellington. "That stopped the nervousness and the (kiwi/Aussie) cross came back from its spike this morning." 

US markets are closed for the Independence Day holiday today, and investors will be watching for US non-farm payrolls data at the end of the week for a steer on the American economy's labour market. The kiwi edged up to 71.77 US cents at 5pm in Wellington from 71.62 cents last week. 

The New Zealand Institute of Economic Research's quarterly survey of business opinion and real estate data are scheduled for release tomorrow, ahead of a GlobalDairyTrade auction on Tuesday in the US. 

OMF's Ive said New Zealand's Reserve Bank is still weighing up the Auckland housing market against the strong currency, and will probably want to impose more macro-prudential tools to slow down property price gains before cutting interest rates again. New Zealand's two-year swap rate increased one basis point to 2.17 percent at 5pm in Wellington, and 10-year swaps edged up one basis point to 2.59 percent. 

The kiwi was little changed at 54.02 British pence from 53.99 pence last week, and traded at 64.44 euro cents from 64.35 cents. It rose to 73.70 yen from 73.45 yen and gained to 4.7799 Chinese yuan from 4.7654 yuan.

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