Kiwi dollar drops against Aussie

  • 04/08/2015
Kiwi dollar drops against Aussie

The New Zealand dollar has fallen against its trans-Tasman counterpart after the Reserve Bank of Australia toned down its calls for a weaker Australian dollar, while data showed Australian retail sales were better than expected.

The kiwi fell to 89.27 Australian cents from 90.02 cents immediately before the RBA announcement, and 90.26 cents yesterday.

The RBA kept the target cash rate at two percent, saying it will continue to monitor the economy and financial conditions for future decisions.

Governor Glenn Stevens said "the Australian dollar is adjusting to significant declines in key commodity prices", having previously said further depreciation as both likely and necessary.

Bureau of Statistics figures showing June retail sales were stronger than expected also weighed on the kiwi/Aussie cross, as did ASX-listed power company Origin Energy's decision to sell its 53 percent stake in NZX-listed Contact Energy for $1.8 billion on the prospect of funds being repatriated across the Tasman.

"The key thing was the declining level of concern from the RBA on the value of the Australian dollar," said Sam Tuck, senior FX strategist at ANZ Bank New Zealand in Auckland.

"That took the Aussie up a little bit, and the kiwi/Aussie was a little bit lower."

The kiwi was little changed at 65.62 US cents at 5pm in Wellington from 65.70 cents at 8am and down from 65.89 cents yesterday.

The kiwi fell to 81.35 yen from 81.72 yen yesterday and to 4.0731 Chinese yuan from 4.0859 yuan. It was little changed at 59.95 euro cents from 60 cents.

NZN