NZ dollar slips vs Aussie on strong building approvals across the Tasman

Westpac Banking Corp senior strategist Imre Speizer says there has been volatility in the Australian data.

The New Zealand dollar fell against the Australian dollar after figures showing a sharp jump in building approvals across the Tasman revived optimism about the strength of Australia's economy.

The kiwi declined to 91.31 Australian cents as at 5pm in Wellington on Tuesday from 91.54 cents at 8am and 91.43 cents the day before. It was at 71.79 US cents from 71.78 cents on Monday.

Australian building approvals climbed 12 percent in November from October, driven by a 31 percent jump in apartment permits, the Australian Bureau of Statistics said. Economists predicted approvals would drop 1 percent decline. The Aussie dollar gained on the release, with the property market expected to cool this year after a dip in home prices in the 2017 December quarter.

"There was some minor volatility and was mostly around the Aussie data," said Westpac Banking Corp senior strategist Imre Speizer. "It was pretty strong and that caused some Aussie-kiwi buying. That's probably the main interest of the day."

The kiwi traded at 80.85 yen versus 81.24 yen on Tuesday. The Japanese currency gained on headlines about less buying of long-end bonds by the Bank of Japan. According to Dow Jones Newswires, the 5 percent reduction to 190 billion yen of bonds maturing in 10-to-25 years was a sign of slight policy tightening by the central bank and pushed the yen higher.

The kiwi remained firm against the euro, trading at 59.96 euro cents from 59.65 cents after the common currency corrected slightly as investors took profits from a recent strong run.

The trade-weighted index rose to 74.64 from 74.57 and the kiwi was at 4.6661 Chinese yuan from 4.6569 yuan. The local currency traded at 52.87 British pence from 52.91 pence on Tuesday.

New Zealand's two-year swap rate rose 1 basis point to 2.18 percent while the 10-year swap rose 2 basis points to 3.14 percent.

(BusinessDesk)


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