Kiwi climbs against Australian dollar

  • 06/05/2013

The New Zealand dollar has hit a new three-and-a-half-year high against its Australian counterpart after weaker than expected consumer spending figures in Australia.

The kiwi rose as high as 83.17 Australian cents and traded at 83.08 cents on Monday at 5pm in Wellington from 82.64 cents on Friday in New York. The currency traded at 85.46 US cents at 5pm, up from 85.30 cents at 8am, and 85.32 cents last week.

Australia's retail sales fell 0.4 percent in March, falling short of economists' forecast of 0.1 percent growth, and fuelling speculation the Reserve Bank of Australia will start leaning towards a rate cut.

New Zealand's central bank is more likely to lift interest rates. The yield on New Zealand's 10-year government bond was 3.23 percent at 5pm in Wellington, more than 10 basis points above its Australian counterpart.

"There are a couple of views (for the RBA to cut on Tuesday) out there that you can't pooh-pooh, so beware a surprise move," said Alex Hill, currency strategist at HiFX in Auckland.

"If the kiwi closes above 83 Australian cents, its' next target will be 84."

New Zealand's household labour force survey is the main data point for local traders this week, and is expected to show the unemployment rate fell a tenth of a percentage point to 6.8 percent in the first three months of the year.

Its precursor data, the quarterly employment survey and labour cost index are scheduled for release on Tuesday, and are forecast to respectively show private sector wages rose 1 percent, after a 0.4 percent decline in the December quarter, and an unchanged pace of private wage inflation 0.5 percent in the March quarter.

The kiwi traded at 65.13 euro cents on Monday at 5pm in Wellington from 65.05 cents last week and was at 54.85 British pence from 54.78 pence. It rose to 84.70 yen from 84.48 yen on Friday, while the trade-weighted index gained to 78.80 from 78.64.


source: newshub archive