tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Saturday, December 7th, 8:03AM

Investments

rss
Latest Headlines

NZ dollar falls as deadline arrives for South Canterbury Finance

The New Zealand dollar fell as the deadline arrives for South Canterbury Finance, which is trying to stave off a collapse which would cost the government some $600 million.

Tuesday, August 31st 2010, 12:53PM

by BusinessDesk

The country's second-biggest finance company has until the end of the day to announce a capital injection which would satisfy its trustee, and avoid calling on the government to bail-out distressed investors under the retail deposit guarantee.

A collapse would weigh on investors' optimism over the state of New Zealand's economy, with the financier being a large lender to agriculture sector in the South Island. Global sentiment was muted in the London and New York sessions, with stocks on Wall Street falling amid disappointment Federal Reserve chairman Ben Bernanke didn't announce extra quantitative easing in his speech to the central bankers' summit on Friday.  

"The main thing today is any announcement regarding South Canterbury Finance, which has until the end of the day to come up with a plan, and we'll see whether the government will stump up with some cash or not," said Khoon Goh, head of market economics and strategy at ANZ. "Risk aversion is back and we're seeing risk assets being sold and save haven demand flowing into U.S. government bonds," which is keeping the kiwi under pressure, he said.

The kiwi dropped to 70.68 US cents from 70.98 cents yesterday, and was little changed at 66.30 on the trade-weighted index of major trading partners' currencies from 66.36. It fell to 59.77 yen from 60.12 yen yesterday, and rose to 79.22 Australian cents from 78.95 cents. It was little changed at 55.80 euro cents from 66.78 cents yesterday, and rose to 45.70 pence from 45.58 pence.

Goh said the currency may trade between 70.55 US cents and 71.25 cents today, as the South Canterbury decision hangs over it, ahead of Australian data this afternoon.

Data across the Tasman will likely show retail spending and building approvals are still subdued in Australia, though tomorrow's second-quarter gross domestic product release is forecast to show the Australian economy grew 0.9% in the three months through June.

Goh said Australia's economy is still in reasonably good shape, and is being driven by the mining sector rather than consumer spending and housing.

The Bank of Japan boosted its liquidity facility by 10 trillion yen yesterday after holding an emergency meeting to counter the strength of the yen. The move disappointed the markets, with the currency strengthening to 84.58 per US dollar, near a 15-year high.

« Key rejects claim govt to blame for SCF’s woesSouth Canterbury calls in receivers »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
Today's Best Bank Rates
Rabobank 5.25  
Based on a $50,000 deposit
More Rates »
News Bites
Latest Comments
  • Advisors must take note of supervisor guidelines on AML/CFT
    “When I read this, the following memory plucked a note. Venue was a US financial planning conference maybe 30 years ago. Speaker...”
    21 hours ago by Murray Weatherston
  • Partners kills its matrix
    “@Backstage, thanks. I agree there is no relationship to CoFI, though, from a service perspective, I have two other providers...”
    3 days ago by JPHale
  • Partners kills its matrix
    “Partners Life has decided to stop using its COM for advisers as it believes the system may breach the CoFI regulations which...”
    4 days ago by Amused
  • Partners kills its matrix
    “Insurance companies should stick to their lane. They are not advisers and even those that employ advisers should not be crossing...”
    4 days ago by Tash
  • [GRTV] The nitty gritty of Smart’s ETFs
    “Advisors should consider all gateways into investment markets including cheaply priced ETFs to provide access to low priced...”
    4 days ago by Pragmatic
Subscribe Now

Deposit Rates newsletter

Previous News

MORE NEWS»

Most Commented On
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com