by BusinessDesk
The NZ dollar rose as high as 91.01 cents after the Reserve Bank of Australia (RBA) hiked its cash rate by 25 basis points to 2.95%, more than half a percentage point lower than New Zealand’s 3.5% official cash rate.
The NZ dollar traded at 58.50 US cents at 5.15pm in Wellington, from 58.19 cents yesterday.
Electus Financial director Mike Houlahan said the move was widely expected because the RBA took a more cautious approach to its tightening regime.
He said that was probably because a sizeable chunk of Australia’s mortgages was on floating rates.
The prospect of further interest rate hikes in NZ would support the kiwi’s strength against its Australian counterpart, he said.
Statistics NZ will tomorrow publish September quarter labour data which analysts expect will show the unemployment rate falling to 3.2% from 3.3%.
That may prompt the Reserve Bank to raise the official cash rate by 75bp to 4.25%.
Craigs Investment Partners head of private wealth research Mark Lister said there would be keen interest in the employment data tomorrow given the Reserve Bank has a mandate to maintain maximum sustainable employment alongside its inflation target.
Lister said it had been a quiet day on New Zealand’s stock market as investors waited for tomorrow’s data and central bank movements in the United States and the United Kingdom. US company earnings are also in view.
“There is a lot going on in the next week or so and it isn’t unexpected for people to be paring back a bit,” he said.
The S&P/NZX 50 index decreased 21.79 points, or 0.19%, to 11,316.64.
Across the main board, stocks 72 rose and 63 fell. Turnover was $130 million.
Manawa Energy led the top 50 higher, up 4.3% to $5.5.
Fisher and Paykel Healthcare shares went up 2.9% to 20.16.
Shares in private hospital owner Vital Healthcare also went up 2.6% to $2.40.
Faith-based software provider Pushpay again dominated the day’s turnover with $45.2m traded and rose 1.6% to $1.27 – still below the $1.34 takeover offer.
Other software companies also rose, with Trade Window leading the main board higher, up 9.5% to 58c.
Payroll provider PaySauce was also up 8.5% to 32c.
Metro Performance Glass dragged the market lower, falling 9% to 22c.
New Zealand King Salmon fell 8.5%, or 2c, to 21c after it was announced the company’s chief executive Grant Rosewarne had resigned abruptly.
Port of Tauranga fell 3.4% to $6.47. Other logistics companies also fell, with Mainfreight down 2% to $74 and Freightways down 1.3% to $10.21.
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