Auckland, New Zealand -- (SBWIRE) -- 06/18/2013 -- According to the latest ASB Kiwi Dollar Barometer, New Zealand businesses expect the NZD/USD to peak at around 85 cents in September.

ASB Chief Economist Nick Tuffley says, "The steady depreciation in the NZD/USD since the survey was taken in late April and early May means expectations for the currency may be lower had the survey been conducted later in May. We have recently revised down our forecasts for the NZD/USD, reflecting our expectations of a stronger USD."

Expectations the NZD is nearing its peak saw increased interest to hedge amongst importers. There was an increase in both the proportion of importers indicating they were planning to hedge, as well as the proportion of FX exposures that importers indicated they intended to hedge.

Larger businesses were more likely to use external advisors and consider them useful when making decisions on hedging. "There appears to be scope for small and medium-sized businesses to make more use of external advisors in the decision-making process. Of course, the feasibility of using external advisors will depend on the size of FX exposures relative to any added cost of that advice."

The Barometer finds businesses continue to see interest rate differentials as the key factor behind the strength in the NZD/USD. However, the perceived importance of quantitative easing by major central banks has surged over the past six months, and is now seen as the second most important driver amongst businesses surveyed.

"The substantial amount of stimulus injected by the Federal Reserve, Bank of England, European Central Bank and now the Bank of Japan has generally placed downward pressure on their currencies over the past year," concludes Mr Tuffley.

Key "take-outs" from the ASB Institutional Kiwi Dollar Barometer

The results from the Kiwi Dollar Barometer indicate businesses are generally expecting the NZD to peak soon. As a result, importers in the survey saw increased opportunity for hedging, in order to lock in a favourable exchange rate. Over Q2, there has been an increase in both the proportion of importers intending to hedge, as well as the proportion of FX exposures these importers planned to hedge.

The Kiwi Dollar Barometer again finds that larger businesses tend to report higher rates of success with hedging. This likely reflects the more extensive resources larger companies have for managing their business risk. Larger businesses also tend to make more use of external advisors, and are more likely to see them as playing an important role in decisions on hedging. The results suggest there is scope for smaller-sized businesses to make more use of external advisors.

For more info http://reports.asb.co.nz/report/article/16865/13452/0/businesses-see-the-nzd-peaking.html

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The ASB Cantometer snapshot index edged higher again in May, lifting to 0.7 from 0.6. The construction index continued to lift in May, underpinned by a further increase in residential consent issuance and concrete usage.

Auckland Central, Auckland -- (SBWIRE) -- 06/11/2013 -- Construction and Labour Inflows Boost Canterbury Activity

- The ASB Cantometer lifted again in May, boosted by broad-based increases in activity.

- Construction demand continues to drive the index with residential consents and concrete usage now above previous peak levels.

- Solid demand for additional labour continues to support population inflows.

The ASB Cantometer snapshot index edged higher again in May, lifting to 0.7 from 0.6.

ASB Chief Economist Nick Tuffley says, "The increase in the index was relatively broad-based across activity indicators suggesting that construction activity is now leading to increased demand in the wider Canterbury economy."

The construction index continued to lift in May, underpinned by a further increase in residential consent issuance and concrete usage. Mr Tuffley says, "Consent issuance and concrete usage have now lifted above the previous peak recorded during 2007, highlighting that that the rebuild is starting to gather pace."

Electricity data for the March quarter also pointed to a strong increase in energy demand in the region, indicating further activity growth.

Permanent and long-term net migration also continues to lift as increasing employment demand attracts labour into the city. Mr Tuffley says, "Permanent and long-term arrivals into Canterbury have steadily increased and are now up 77% from year-ago levels."

Mr Tuffley adds the increase in labour demand is finally showing up in employment figures. "The number of full-time-equivalent employees has increased steadily over the March quarter and figures are now sitting above pre-earthquake levels," says Mr Tuffley.

Outlook

"Over the coming year, the RBNZ will balance the Canterbury construction-led lift in activity and intensifying housing market pressures against the impact of the elevated NZD. At the March MPS the RBNZ expressed concern around the prospect for stronger construction inflation, although so far, price increases have remained contained to Canterbury. We continue to expect the RBNZ will leave the OCR unchanged until March 2014," concludes Mr Tuffley.

About the Cantometer

The Cantometer is designed to summarise activity in Canterbury. The study takes a range of publically available regional economic data, which are standardised and aggregated into a summary measure. The index has been rebased to zero in June 2010 (the end of the quarter immediately preceding the first earthquake) such that a positive number represents activity being above pre-earthquake levels.

Along with the aggregate Cantometer index, there are five sub categories: Construction, Housing, Employment, Consumer spending and Miscellaneous*.

These sub-indices will provide some insight into which sectors are driving the rebuild activity at a given point in time.

For most activity the data reference the level of activity. However, when incorporating wages and house prices into the index we believe levels are less informative. Instead the index uses prices relative to the rest of the country.

An increase in relative prices is a signal for resources to be reallocated to the Canterbury region.

The historical Cantometer series represented on the charts is a simple average of the complete set of data for each month.

*The miscellaneous category includes electricity, car registrations, guest nights and permanent and long-term net migration. A common factor driving these areas will be population growth, and we expect all these indicators to increase as the rebuild gathers momentum.

For more information on this press release visit: http://www.releasewire.com/press-releases/release-3.htm