The New Zealand dollar rose slightly today after a sleepy session yesterday as the focus in global markets remained on the Irish debt crisis.
By 5pm the NZ dollar was at US77.39c, which was up from US77.06c at 8am and US76.62c at 5pm yesterday. It had hit a two week
low of US76.32c on Wednesday night.
The producers' price index released today rose 1.2 per cent in the September quarter, which is more than the 0.6 per cent expected by the market.
BNZ Research said the inflation measure could be volatile but did not seem to be related to usual causes of volatility such as wholesale electricity and gas prices.
"We found further evidence in today's producer prices that inflation is on the rise - bolstered by commodities, for sure, but also at heart," BNZ said.
"This affirms our belief that inflation will probably surprise many with its strength over the coming period, which should keep the Reserve Bank very much on it toes - even though the near-term growth picture does not appear that compelling," it said.
Finance Minister Bill English said today forecast growth will be lower than expected in the half-year economic and fiscal update to be released next month.
He said the economy was recovering but growth would not really pick up until next year.
The focus in international markets was on the euro, which was firm today on hopes that Ireland's debt crisis will be resolved. The Irish government will hold talks with officials from the European Union, IMF and European Central Bank in coming days and commentators are hopeful of a resolution.
The NZ dollar was little changed at 0.5696 euro from 0.5697 euro at 8am today, which was up from 0.5671 euro at 5pm yesterday.
It was at A78.62c at 5pm against A78.43c yesterday and at 64.47 yen from 63.87 yen yesterday.
The trade weighted index was 69.39 at 5pm from 68.96 at 5pm yesterday.
- NZPA
