Free audio stream, including stories that are padlocked on our site. Listen on any device, anywhere. Updated twice daily. The audio stream takes several seconds to start on Android devices.Launch Radio player
The New Zealand dollar held gains today after Australian capital expenditure figures beat expectations, adding to optimism about the local economy after Fonterra Cooperative Group affirmed its forecast payout to farmers and signed up to a deal to distribute its products into China.
The kiwi rose to 83.91 US cents at 5pm in Wellington from 83.75 cents at 8am and 83.67 cents yesterday. The trade-weighted index was 79.06 from 79 yesterday.
Australian capital expenditure rose 1.1 percent in the second quarter, beating expectations for a 0.5 percent contraction, and first-quarter figures were revised up. That stoked demand for the Australian dollar, which dragged its New Zealand counterpart higher. The kiwi fell to 89.05 Australian cents from 89.77 cents after the capital expenditure figures.
"We had private capex out of Australia - the last couple were really quite weak, but this one was better than expected," said Michael Johnston, senior trader at HiFX in Auckland. "Short-term the kiwi could push up higher, but it's still a sell on rallies" over the medium-term, he said.
The kiwi was already supported by Fonterra's announcement yesterday affirming its forecast payout to farmers for the 2015 season, and announcing a joint venture with China's Beingmate to sell infant formula into the world's most populous nation. Westland Milk, a smaller rival to Fonterra, today cut its forecast payout for the 2015 seasons, citing falling global dairy prices and the strong kiwi dollar.
HiFX's Johnston said month-end positioning would also help support the Australian and New Zealand currencies as major fund managers tilted their portfolios.
Traders will be looking at US housing, employment and GDP data in coming days to gauge the strength of the world's biggest economy. A recent string of upbeat US data has underpinned growing expectations the Federal Reserve will start raising interest rates earlier and faster than anticipated.
The local currency was little changed at 87.04 yen at 5pm in Wellington from 87.02 yen yesterday, and edged down to 63.52 euro cents from 63.57 cents. It was unchanged at 50.55 British pence.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Warehouse CEO to depart as company fades
- MARKET CLOSE: Shares follow ASX lower, paced by Spark, Xero
- Invivo Wines beats equity crowdfunding records
- POLL RESULT: Should the govt put funds toward the next America's Cup if there's no Auckland qualifying series?
- Dollar slips as traders look ahead to dairy auction, US payrolls data