12 Dec 2013

NZ dollar rises to five year high against the Australian

7:34 pm on 12 December 2013

The New Zealand dollar rose to a fresh five-year high against the Australian dollar and retraced its weakness overnight on Wednesday against the US dollar.

ASB Bank head of external foreign exchange sales Tim Kelleher says the kiwi had dropped because of the budget deal in the United States but then the Reserve Bank's monetary policy statement provided support for the currency.

He says a rate increase is definitely coming but it's a matter of when and the majority of the banks now expect a move in March.

At about 5pm on Thursday, the kiwi was trading at 82.67 US cents, 91.65 Australian cents, 50.52 British pence, 0.5991 euro and 84.74 yen.

Sharemarket makes small gain

The sharemarket eked out a small gain, the benchmark Top 50 Index rising 4 points to 4708.

First NZ Capital client adviser Don Lewthwaite says negative announcements from some companies have pushed their share prices lower.

Hallenstein Glasson shares fell 20 cents to $3.70 after the company told the annual shareholders' meeting it's desperate for sales to pick-up because otherwise first-half profit may fall even more than the 20% drop the company has already signalled.

Mr Lewthwaite says Fonterra continued to sell shares on Thursday after it slashed its dividend from 32 cents to 10 cents a share on Wednesday.

But he says Synlait improved markedly and continued its strong run.

Fonterra shares, which only farmers can own, dropped 12 cents to $5.64 while units in the Fonterra Shareholders Fund, which anyone can own, fell 11 cents to $5.64.

Synlait Milk rose 14 cents to $4.09. On Wednesday, Synlait said full-year earnings are likely to be higher than its $19.7 million forecast.