Kiwi rises to 4-month high v Aussie on favourable economic outlook
The New Zealand dollar rose to a four-month high against the Australian dollar on optimism the local economic outlook favours the kiwi over its trans-Tasman counterpart.
The kiwi traded at 95.19 Australian cents as at 8:30am in Wellington, and earlier touched 95.53 cents, the highest since early February, from 95.09 cents late yesterday. It traded little changed at 70.82 US cents from 70.85 cents. The trade-weighted index slipped to 76.41 from 76.57.
Evidence that the New Zealand economy is in good heart includes a gain in business confidence in May and the Treasury's upgraded forecasts for gross domestic product in Budget 2017, while exports reached a record for the month of April and Fonterra Cooperative Group released a higher milk payout forecast for 2018. Across the Tasman, construction work slowed in the first quarter and there's concern weaker Chinese demand for iron ore, which is driving down prices, is eroding the value of Australia's exports.
"It's hard not to be still bullish when economic factors are stacked in NZ's favour compared to Australia," said Jason Wong, currency strategist at Bank of New Zealand. "It might be time to wheel out our parity party note again, although officially our forecast doesn't have that for another 18 months."
Figures this morning from Quotable Value showed residential property values rose 0.4 percent in the three months through May for an annual rate of 9.7 percent, the slowest in about two years, reflecting weakness in the Auckland market. First-quarter terms of trade are due for release at 10:45am this morning, while across the Tasman, Australia releases retail sales figures for April.
The kiwi fell to 63 euro cents from 63.41 cents and declined to 54.89 British pence from 55.28 pence. It fell to 4.8200 yuan from 4.8423 yuan and dropped to 78.39 yen from 78.62 yen.