11 Sep 2014

Market reacts positively to OCR hold

7:34 pm on 11 September 2014

The New Zealand dollar fell about half a cent against the US dollar and nearly a cent against the Australian dollar today, while shares rose, after the Reserve Bank signalled interest rates will rise later than previously forecast and will not rise by as much.

NZ twenty and five dollar notes.

The NZ dollar fell today against the US and Australian dollars while shares rose. Photo: RNZ / Diego Opatowski

Westpac currency strategist Imre Speizer said news that Australia's unemployment rate fell also had an impact.

"They reported a very large gain in employment for the month. Some of it will be under suspicion until the figures are double-checked and triple-checked later on but for now it looks like their labour market is much stronger than expected."

A short time ago, the New Zealand dollar was trading at 81.86 US cents, 89.11 Australian cents, 50.53 British pence, 0.6342 euro, 87.52 yen and 5.02 renminbi.

New Zealand shares were stronger today, the benchmark Top 50 Index rising 26 points to 5262.

Salt Funds Management managing director Paul Harrison said the market had reacted positively to the Reserve Bank announcement.

"We've seen the Reserve Bank come out and hold interest rates steady and give a reasonable positive outlook in terms of holding rates down until they see a need to put them up, which is pretty positive for investors here."

Genesis shares rose 2.5 cents to $1.925.

Meridian Energy rose six cents to $1.41.

Sky TV rose 14 cents to $6.39.

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