31 Oct 2013

Bumpy ride for the Kiwi

7:22 pm on 31 October 2013

The New Zealand dollar finished Thursday little changed but that belied the roller coaster ride it had earlier, caused by American and domestic central bank statements.

Firstly, the Federal Reserve's statement was interpreted as less dovish than expected.

The Fed had been expected to acknowledge the weakness shown in recent US data, but instead it was generally optimistic.

The market started buying US dollars - which pushed the Kiwi lower - because it interpreted the statement as meaning the Fed could start to curtail its printing of money as early as December.

But the New Zealand dollar rose again after New Zealand's Reserve Bank said the local economy probably grew more than 3% in the 12 months to September.

ASB Bank head of external foreign exchange sales Tim Kelleher says he isn't expecting much change in the currency overnight, but if it rallies it would be expected to go to the level of 83 - 83.5 US cents.

At about 5pm on Thursday the New Zealand dollar was trading at 82.51 US cents, 86.88 Australian cents, 51.5 British pence, 0.6016 euro and 81.23 yen.

Sharemarket falls then regains

The share market also had a roller coaster day on Thursday after falling in morning trading but ending the day with the benchmark Top 50 index gaining 42 points to a record 4910.

First NZ Capital broker Don Lewthwaite says Fletcher Building, New Zealand's largest listed company, accounted for much of the index's gain.

He says Fletcher Building has been quite a volatile stock considering it's a reasonably solid industrial.

Mr Lewthwaite says Fisher & Paykel also had a good day and has become a core portfolio stock for a lot of clients.

But he says the main excitement was GeoOp coming on at a very strong premium.

Fletcher Building shares gained 35 cents to $9.99 and Fisher & Paykel Healthcare shares rose 11 cents to $3.68.

GeoOp, whose shares were sold at $1 each in the initial price offering, debuted at $2.38 and then traded a wild range between $1.79 and $2.40 before ending the day at $2.20.

That lifted GeoOp's market value from the $27.3 million float valuation to $61.4 million.