16 Dec 2013

NZ dollar little changed on Monday

7:25 pm on 16 December 2013

The New Zealand dollar was little changed on Monday but held its gains of last week, particularly against the Australian dollar.

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Photo: PHOTO NZ

Rankin Treasury Advisory director Derek Rankin says the Australian dollar is very weak against all major currencies.

He says the Reserve Bank of Australia governor Glenn Stevens has been saying he wants the Australian dollar lower, in the past he has talked about intervention and cutting interest rates.

Mr Rankin says he's talked about wanting it down to 85 cents to the US dollar and so the Australian dollar is under a lot of downward pressure.

He says at the same time all the New Zealand numbers are strong and last week the Reserve Bank of New Zealand indicated that at some point it will raise interest rates.

Mr Rankin says Australia wanting to cut interest rates and New Zealand looking to raise them is driving that New Zealand-Australian cross higher.

He says that will be damaging to the manufacturing sector in New Zealand that exports to Australia.

At about 5pm on Monday, the kiwi was trading at 82.65 US cents, 92.37 Australian cents, 50.72 British pence, 0.6007 euro and 85.03 yen.

Sharemarket gains 19 points

The sharemarket was stronger, the benchmark Top 50 Index gaining 19 points to 4736.

Forsyth Barr advisor Euan McIntosh says investors are starting to see some value again.

He says the last couple of weeks of investors pulling back may have yielded enough value that investors are now looking to top up on holdings again or identify longer term value.

Fonterra shares, which only farmers can own, rose 14 cents to $5.83 while the units, which anyone can own, gained 13 cents to $5.81.

Fonterra shares have dropped from $6.56 earlier this month, while the units have fallen from $6.58.

Mr McIntosh says Chorus pulled back dramatically and then at the end of last week the share price moved forward, but on Monday it has come back by about 3.5%.

He says the Ernst & Young report doesn't seem to have allowed the stock price to hold up.

Chorus shares rose as high as $1.53 on Monday but closed at $1.43, down 4 cents from Friday.