NZ dollar gains on record Australian building approvals, RBNZ warns on strong currency
The New Zealand dollar followed its Australian counterpart higher as a jump in Australian building consents helped lift both currencies and after Reserve Bank governor Graeme Wheeler said a strong kiwi may limit the timing and extend of next year's rate hikes.
The kiwi rose to 82.50 US cents at 5pm in Wellington from 82.25 cents at 8am and 82.28 cents yesterday. The trade-weighted index advanced to 76.33 from 76 yesterday.
Australian new home building approvals climbed 14 percent last month, according to the Bureau of Statistics, and well ahead of the 2.8 percent increase forecast. That lured investors back to the trans-Tasman currencies, and the Australian dollar rose to 94.89 US cents at 5pm in Wellington from 94.67 cents yesterday. New Zealand's building consents rose 4.1 percent in September, according to government figures today.
"Australia's building consent numbers were outstanding," said Alex Hill, head of dealing at HiFX in Auckland. "That helped keep the kiwi up."
The construction data came after New Zealand's central bank held the official cash rate at 2.5 percent, as expected, while saying sustained strength in kiwi would give him greater flexibility as to the timing and magnitude of next year's expected rate hikes.
The RBNZ statement was preceded by the Federal Reserve's monetary policy review, which kept the US$85 billion money printing programme unchanged, while giving a more upbeat assessment of the world's biggest economy than anticipated.
HiFX's Hill said the local currency is trading between 81.80 US cents and 83.20 cents, and isn't going to move "unless the US dollar does."
The local currency crept up to 86.90 Australian cents from 86.76 cents yesterday and advanced to 81.24 yen from 80.65 yen. The kiwi gained to 51.49 British pence from 51.25 pence yesterday and rose to 60.17 euro cents from 59.82 cents.
(BusinessDesk)
Paul McBeth
Wed, 11 Jul 2018
Wed, 11 Jul 2018
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NZ dollar gains on record Australian building approvals, RBNZ warns on strong currency
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