7 Jan 2015

NZ dollar expected to stay steady

3:31 pm on 7 January 2015

A foreign exchange strategist says the New Zealand dollar will not reach parity with its Australian peer any time soon, after it hit a post-float high this morning.

The kiwi rose sharply against the Australian dollar to 96.22 cents just after milk prices rose in Fonterra's dairy auction overnight.

Bank of New Zealand currency strategist Raiko Shareef said the kiwi would not move much from its current position for the rest of the year.

"We are envisioning somewhere in the range of the low 90s over the coming year. We don't envision us falling below 90 cents before the end of this year."

However, Mr Shareef said the kiwi may currently be slightly overvalued against the aussie especially as the New Zealand economy is coming off the boil.

A short time ago, the New Zealand dollar was hovering around 96 Australian cents.

NZ escapes share drop

Global equities continue to slide after yesterday's sell-off sparked by the lowest oil prices in five-and-a-half years and fears about the strength of the global economy.

However, New Zealand shares have escaped relatively unscathed, with the benchmark top NZX 50 Index down just 0.2 percent a short time ago.

Wall Street ended lower for a fifth session today, with the benchmark Standard and Poor's 500 Index losing 4.2 percent for the last five sessions.

Australian shares have also been hit hard, with the ASX 200 Index dropping 1.6 percent yesterday, and has lost about two-thirds of a percent so far today.

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