Kiwi rises to five-week high against Australian dollar

The kiwi rose to a five-week high against the Australian dollar, extending its gains of the past week on expectations the Reserve Bank is more inclined to raise interest rates while its counterpart could be looking at a cut.

It rose to 79.66 Australian cents at 5pm in Wellington from 79.52 cents at the start of the day and earlier reached 79.73 cents, the highest since November 5. It traded at 83.43 US cents from 83.40 cents at the start of the day and up from 83.27 cents a day earlier.

The kiwi has advanced against its trans-Tasman counterpart since the Reserve Bank of Australia cut its key rate to 3 percent on December 4, citing a subdued economic outlook.

Two days later, Reserve Bank governor Graeme Wheeler all but ruled out a rate cut, citing inflationary pressures on the horizon from Auckland's housing market and the rebuild of Christchurch.

The kiwi's gain "is on the view that the RBNZ's next move is a hike and the next move in Oz is a cut", says Tim Kelleher, head of institutional FX sales at ASB Institutional.

It could climb to 80 Australian cents, but at that level "there were plenty of sellers". The local currency could again test its recent trading range upper level of around 83.50 cents, though it could run into sellers at around 83.75 cents.

The trade-weighted index rose to 74.69 from 74.57 at the start of the day and little changed from 74.64 the previous day.

Underlining the relative strength of the domestic economy, Real Estate Institute figures showed the median house price in New Zealand set a record for a second straight month, reaching $383,250 in the strongest sales volume in five years.

Sales rose 24 percent to 7454 in November from a year earlier.

Government figures showed retail spending on debit, credit and charge cards rose 0.5 percent last month, more than expected, stoking optimism for a fourth-quarter rebound in retail sales after a surprise decline in the third quarter.

Currency markets are awaiting the outcome of the Federal Open Market Committee's two-day meeting starting overnight amid speculation the Fed could announce an escalation of its quantitative easing measures as its Operation Twist comes to an end.

Still, with little sign that politicians in Washington can resolve their differences over the fiscal cliff, some strategists believe the Fed will keep its powder dry.

The kiwi traded at 64.50 euro cents from 64.58 cents the previous day and slipped to 51.89 British pence from 51.96 pence. It was at 68.77 yen from 68.70 yen.


Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

Comments & Questions

Commenter icon key: Subscriber Verified

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot


Sym Price Change
USD 0.6692 0.0000 0.00%
AUD 0.9312 0.0000 0.00%
EUR 0.6023 0.0000 0.00%
GBP 0.4576 0.0000 0.00%
HKD 5.1986 0.0000 0.00%
JPY 73.7220 0.0000 0.00%


Commodity Price Change Time
Gold Index 1212.7 -6.530 2016-05-27T00:
Oil Brent 50.0 0.550 2016-05-27T00:
Oil Nymex 49.3 -0.080 2016-05-27T00:
Silver Index 16.3 -0.070 2016-05-27T00:


Symbol Open High Last %
NZX 50 6948.8 6996.2 6947.9 0.64%
NASDAQ 4904.1 4933.5 4901.8 0.65%
DAX 10257.9 10298.8 10272.7 0.13%
DJI 17826.8 17873.2 17828.3 0.25%
FTSE 6265.6 6275.9 6265.6 0.08%
HKSE 20425.0 20620.2 20397.1 0.88%
NI225 16830.5 16901.1 16772.5 0.37%
ASX 5388.1 5427.7 5388.1 0.33%