NZ dollar gains ahead of Wheeler speech, government's fiscal update

Thursday 8th December 2016

The New Zealand dollar rose ahead of a speech by Reserve Bank Governor Graeme Wheeler and before the government's fiscal and economic update, which may paint a more upbeat picture of the outlook.

The kiwi dollar rose to 71.45 US cents as at 8am in Wellington from 71.19 cents late yesterday. The trade-weighted index climbed to 78.29 from 78.17.

Wheeler's speech, titled ‘Some thoughts on New Zealand’s Economic Expansion,’ is to be published on the RBNZ website at 9am. Wheeler cut the official cash rate to a record low 1.75 percent on Nov. 10 in what was seen as the last step of an easing cycle, with signs inflation will pick up this quarter. Meanwhile, the Half-Year Economic and Fiscal Update is released at 1pm today and will help set the stage for an election-year budget next May, although Finance Minister Bill English is expected to have become prime minister by then, handing the Treasury portfolio to his successor.

"With the looming vote for a new PM, focus will probably be more on the finance minister’s delivery than the rosy fiscal accounts," Jason Wong, currency strategist at Bank of New Zealand, said in a note.

The kiwi dollar fell to 95.57 Australian cents from 95.71 cents late yesterday, having gained after figures showed the Australian economy shrank a greater-than-expected 0.5 percent in the third quarter. The kiwi dollar rose to 56.62 British pence from 56.26 pence after figures showed British industrial production dropped 1.3 percent in October, against expectations of a gain.

The local currency traded at 66.48 euro cents from 66.41 cents yesterday. ahead of a meeting of the European Central Bank meeting at which President Mario Draghi may extend the ECB's bond purchase programme while hinting at its eventual end.

The kiwi rose to 4.9178 yuan from 4.9051 yuan and rose to 81.43 yen from 81.24 yen.

BusinessDesk.co.nz

Comments from our readers

No comments yet