As yield advantage helps the New Zealand dollar retain its position as the best performing currency this year, comments by New Zealand?s Trade Minister Phil Goff attempted to dissuade investors from one-way bets against the Kiwi.
- [B]Surge in Exchange Rate Has Minimal Short-Term Impact on Tourism[/B]
An NZIER report prepared under the auspices of the Ministry of Tourism suggested that, in the long-term, income growth in origin markets, not currency exchange rate, is the key determinant of expansion in the tourism industry. The elasticity of tourism growth with respect to increase in world incomes is estimated at 1.7 percent, while the short-term sensitivity of overall arrivals to exchange rate appreciation is a modest -0.02 percent.
Tourism demonstrates resilience to high dollar | Scoop News
- [B]ANZ Price Index May Give RBNZ Reason For Interest Rate Hike[/B]
The acceleration in the June ANZ world commodity price index did little to allay the inflationary fears dictating the rate decisions of the Reserve Bank of New Zealand. The index increased month-on-month 6.1 percent in June, largely because prices for dairy products - accounting for a third of the index - have almost doubled since June last year. Since the RBNZ stated rising prices of dairy products as a factor behind last month?s interest rate hike, the next move by the central bank is expected to take the form of further credit tightening.
NZ Herald - Breaking news, latest news, business, sport and entertainment - NZ Herald
- [B]New Zealand Considers Restrictions on Immigration to Curb Inflation[/B]
As New Zealand?s economy remains on the brink of crossing the RBNZ?s inflationary band, Immigration Minister David Cunliffe has announced immigration restrictions as a means to control inflation. The range for number of migrants will be cut to 45,000 - 50,000 this year, down from 47,000 - 52,000 for the year ended June 30.
Bloomberg - Are you a robot?
[B]Currency Market - NZD:
[/B]As yield advantage helps the New Zealand dollar retain its position as the best performing currency this year, comments by New Zealand?s Trade Minister Phil Goff attempted to dissuade investors from one-way bets against the Kiwi. The NZDUSD pair took direction from US fundamentals and tumbled from a 22-year high against the US dollar after labor market data confirmed a recovery by the US economy. New Zealand dollar?s rally against the Japanese yen extended for the longest period in the past two and a half years, as yield differentials continued to lure investors to the carry trade. New Zealand?s currency - up an annual 38 percent against the yen compared to last year - climbed 1.1 percent this week to 0.9621 after a retreat from a 20-year high of 0.9655 reached yesterday.
[B]Equity Market - NZSX-50 Index:[/B]
New Zealand?s equity markets ended the week on a lackluster note as the markets struggled for direction in the absence of significant economic news. The benchmark NZSX-50 Index slid by 13.1 points, or 0.3 percent, to 4223.52 on turnover of NZD 129 million, as losses outnumbered gains 59 to 53. Blue chip stocks continued to take a hit, as Telecom declined 4 cent to NZD462 and Fletcher Building fell 12 cents to NZD1212.
[B]Fixed Income Market - 10-year Government Bonds:[/B]
[/B]Benchmark 10-year bond yields rose to 6.699 as New Zealand?s markets followed the direction of overseas activity given the lack of news in the domestic economic calendar. The increase in yield on government debt came in tandem with a surge in US bond yields after data showed strength in the US labor market and service industries.