New Zealand’s dollar, the best-moving major currency this year, is too powerful and presents a challenge for the nation’s exporters, according to Finance Minister bill English.
“It’s a bit too high,” he said yesterday in an interview in Hong Kong, while attending the Credit Suisse Asian Investment Conference. “It makes it difficult for our economy to rebalance.”
New Zealand’s dollar soared higher today to within 0.2 percent of an 11-month high as traders bet the Reserve Bank of New Zealand will hike up interest rates next month. Governor Graeme Wheeler boosted the official cash rate by a quarter point to 2.75 percent on March 13, becoming the first central banker from a developed nation to tighten this year, and indicate further hikes as inflation pressures emerge.
The central bank sets financial policy independently of the government and focuses on limiting yearly inflation to 2 percent, a goal English stated yesterday he is satisfied with.
A rate hike at Wheeler’s April 24 review is a certainty, according to swaps data recorded by Bloomberg. Eleven of 15 economists surveyed by Bloomberg projected a hike.
New Zealand’s dollar bolstered 5 percent this year to 86.24 U.S. cents as of 11:26 a.m. in Tokyo, the best advance among 16 major currencies recorded by Bloomberg. It reached 86.40 on March 18, the topmost since April 12, and is exchanging nearly 40 percent above its average since it was freely-floated in 1985.
Persisting Strength
“A hawkish central bank has driven the New Zealand currency’s gains,” Nick Bennenbroek, head of currency strategy at Wells Fargo Bank NA in New York, said in a note to clients. “Given the sturdy momentum of the economy, a series of rate hikes looks likely. We anticipate further gains in the currency.”
The kiwi’s power has persisted even after the U.S. Federal Reserve pressed on last week with tri downs in monthly bond purchases, paring a program of quantitative easing that has a goal of debasing the greenback. Atlanta Fed President Dennis Lockhart said on March 25 he expects an hike in benchmark U.S. borrowing costs in the second half of next year.
“We suspect that, when the U.S. starts raising interest rates, it might re-rate,” English said of his nation’s currency. “Whatever happens though, we just focus on what we can control, which is the domestic competitiveness.”
More Rapid Development
Government data on March 20 showed New Zealand’s gross domestic product hiked 3.1 percent in the fourth quarter from a year earlier, logging the second-straight period of development surpassing 3 percent. The median projection of analysts polled by Bloomberg is for the economy to expand 3 percent in 2014, compared with a 2 percent pace seen for Group of 10 nations.
Shipments of milk powder and butter to China are supporting stoke development. Exports skyrocketed 17 percent in February from a year earlier allowing the nation to post its largest trade surplus since April 2011, according to a Statistics New Zealand report released in Wellington today.
“We are reasonably confident that we will enjoy growth of around 3 percent over two to three years,” English said. “The challenge for us is to sustain it beyond the cyclical factors.”
The material has been provided by InstaForex Company – www.instaforex.com
New Zealand’s dollar, the best-moving major currency this year, is too powerful and presents a challenge for the nation’s exporters, according to Finance Minister bill English.
“It’s a bit too high,” he said yesterday in an interview in Hong Kong, while attending the Credit Suisse Asian Investment Conference. “It makes it difficult for our economy to rebalance.”
New Zealand’s dollar soared higher today to within 0.2 percent of an 11-month high as traders bet the Reserve Bank of New Zealand will hike up interest rates next month. Governor Graeme Wheeler boosted the official cash rate by a quarter point to 2.75 percent on March 13, becoming the first central banker from a developed nation to tighten this year, and indicate further hikes as inflation pressures emerge.
The central bank sets financial policy independently of the government and focuses on limiting yearly inflation to 2 percent, a goal English stated yesterday he is satisfied with.
A rate hike at Wheeler’s April 24 review is a certainty, according to swaps data recorded by Bloomberg. Eleven of 15 economists surveyed by Bloomberg projected a hike.
New Zealand’s dollar bolstered 5 percent this year to 86.24 U.S. cents as of 11:26 a.m. in Tokyo, the best advance among 16 major currencies recorded by Bloomberg. It reached 86.40 on March 18, the topmost since April 12, and is exchanging nearly 40 percent above its average since it was freely-floated in 1985.
Persisting Strength
“A hawkish central bank has driven the New Zealand currency’s gains,” Nick Bennenbroek, head of currency strategy at Wells Fargo Bank NA in New York, said in a note to clients. “Given the sturdy momentum of the economy, a series of rate hikes looks likely. We anticipate further gains in the currency.”
The kiwi’s power has persisted even after the U.S. Federal Reserve pressed on last week with tri downs in monthly bond purchases, paring a program of quantitative easing that has a goal of debasing the greenback. Atlanta Fed President Dennis Lockhart said on March 25 he expects an hike in benchmark U.S. borrowing costs in the second half of next year.
“We suspect that, when the U.S. starts raising interest rates, it might re-rate,” English said of his nation’s currency. “Whatever happens though, we just focus on what we can control, which is the domestic competitiveness.”
More Rapid Development
Government data on March 20 showed New Zealand’s gross domestic product hiked 3.1 percent in the fourth quarter from a year earlier, logging the second-straight period of development surpassing 3 percent. The median projection of analysts polled by Bloomberg is for the economy to expand 3 percent in 2014, compared with a 2 percent pace seen for Group of 10 nations.
Shipments of milk powder and butter to China are supporting stoke development. Exports skyrocketed 17 percent in February from a year earlier allowing the nation to post its largest trade surplus since April 2011, according to a Statistics New Zealand report released in Wellington today.
“We are reasonably confident that we will enjoy growth of around 3 percent over two to three years,” English said. “The challenge for us is to sustain it beyond the cyclical factors.”
The material has been provided by InstaForex Company – www.instaforex.com
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