NZ dollar rises to fresh nine-year high against Aussie
Weaker commodity prices weigh more heavily on the Australian economy.
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Hawke’s Bay
The New Zealand dollar touched a fresh nine-year high against the Australian dollar as weaker commodity prices weigh more heavily on the Australian economy.
The kiwi reached 95.72 Australian cents over the weekend, its highest level since December 2005, and was trading at 95.41 cents at 8am in Wellington, from 95.21 cents at 5pm on Friday. The local currency advanced to 77.53 US cents from 77.51 cents at the New York close and 77.36 cents on Friday.
The collapse in the oil price in recent months has led to investors eschewing assets with links to commodities, stoking speculation the Reserve Bank of Australia may cut interest rates which would increase the yield advantage New Zealand has over its neighbouring economy.
The currencies of both countries are also weakening against the US dollar as the world's largest economy continues to improve.
"I've got quite a strong feeling that we are going to test up towards parity (against the Australian dollar) in the first quarter of 2015," said Kevin Morgan, senior dealer foreign exchange and derivatives at OMF in Auckland.
"The negatives for the Australian dollar are similar to the negatives for the kiwi dollar, ie falling commodity prices, but there is a much bigger impact on the Australian economy as a proportion of GDP.
"The kiwi is going to be slightly stronger than the Aussie, keeping the pressure upside on the kiwi/Aussie rate certainly for the next two to three months."
There is little data scheduled for release this week, apart from Chinese manufacturing PMI on Thursday, so traders will be focused on geopolitical events, said OMF's Morgan.
Markets will be closed on Thursday, January 1, for the New Year's Day holiday.
The New Zealand dollar advanced to 63.65 euro cents from 63.32 cents on Friday, edged up to 49.79 British pence from 49.72 pence and rose to 93.34 yen from 92.99 yen. The trade-weighted index was at 78.83.
(BusinessDesk)
Tina Morrison
Mon, 29 Dec 2015
Mon, 29 Dec 2015
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NZ dollar rises to fresh nine-year high against Aussie
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