14 Mar 2014

NZ dollar jumps against the greenback

12:24 pm on 14 March 2014

The New Zealand dollar jumped more than a cent against the greenback on Thursday.

Dollar coins and notes

Photo: PHOTO NZ

ANZ Bank senior foreign exchange strategist Sam Tuck says this follows the Reserve Bank's statement projecting more hikes to the official cash rate and also good economic data coming out from Australia.

He says the decision to hike rates was well anticipated by the market, although the Reserve Bank indicated more hikes before 2015 than the market had anticipated.

Mr Tuck says the comments related to the currency indicated that the RBNZ is less concerned with the strong currency than the market might have otherwise believed.

He says that clears the way for the New Zealand dollar to become stronger because it's unlikely the RBNZ will move against it.

About 5pm on Thursday the Kiwi was trading at 85.60 US cents, up from 84.67 cents at that time on Wednesday.

The Kiwi has been subdued against the Australian dollar, with strong Australian jobs figures offsetting strength following the rise in the OCR. It's at 94.45 Australian cents, 51.48 British pence and 0.6157 euro.

The benchmark top 50 index gained 15 points on Thursday, closing at 5111.

Genesis float news of the day

Devon Funds Management analyst Phill Anderson says it's been a relatively quiet day of trading and the main news has been the details around the Genesis Energy float, now that the Government has published its prospectus for the sale.

Shares will be sold for between $1.35 and $1.65 each, and at that price the dividend yield is forecast to be between 13.5 and 16.5 percent in 2015. The final price and exactly how much of the company will be sold will be announced on 28 March.

Mr Anderson says the Genesis before-tax yield is significantly above the Mighty River, Meridian or Contact Energy yields at the moment, which are all in the vicinity of 9 percent pre-tax.

He says that could make Genesis attractive to investors.