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Aussie resurgence sends kiwi skating

Kiwi trades just above 91 Aussie cents.

Tina Morrison
Thu, 03 Mar 2016

The New Zealand dollar touched a three-month low against its transtasman counterpart after better than expected Australian growth data prompted traders to push out expectations for further interest rate cuts.

The kiwi reached 90.97Ac, and was trading at 91.02Ac at 8am in Wellington, from 91.69Ac at 5pm yesterday.

The local currency advanced to 66.42USc from 66.24USc yesterday, having touched a low of 65.90USc overnight following stronger than expected US labour market data.

The Australian dollar rallied after a report showed gross domestic product grew at a 3% annual pace in the final quarter of 2015, better than the 2.5% pace expected by economists and the Reserve Bank of Australia.

Market pricing for the next RBA interest rate cut has also been pushed out slightly to September from August, Bancorp Treasury Services said in a note.

The Australian dollar "got a lot of momentum off the Australian GDP yesterday," OMF foreign exchange senior dealer Stuart Ive says.

"We saw the move start in our time zone but the Northern Hemisphere really ran with it overnight with the Australian dollar gaining significantly across the board."

Mr Ive says the kiwi had support at 91Ac and would probably consolidate around this level until the Reserve Bank of New Zealand interest rate decision next Thursday.

In New Zealand today, fourth-quarter building work put in place data is released at 10:45am while the ANZ Commodity Price Index is published at 1pm. Australia releases its January trade balance data.

The New Zealand dollar advanced to 61.11 euro cents from 60.99 euro cents yesterday, and gained to 4.3504 yuan from 4.3394 yuan. It fell to 47.18 British pence from 47.48 pence, and slid to 75.31 yen from 75.42 yen. The trade-weighted index was little changed at 72.14 from 72.12.

(BusinessDesk)

 

Tina Morrison
Thu, 03 Mar 2016
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Aussie resurgence sends kiwi skating
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