Kiwi falls ahead of Aussie employment data

BUSINESSDESK: The New Zealand dollar fell in local trading ahead of data that is expected to show Australia's unemployment rate rose to its highest level in three months.

The kiwi fell to 81.64 US cents at 5pm from 82.27 cents yesterday and dropped to 79.84 Australian cents from 80.34 cents. The trade weighted index declined to 73.01 from 73.38.

Australia, New Zealand's largest trading partner, will release its jobless rate tomorrow. A survey of 20 Reuters economist predicts it rose to 5.3% from 5.1%, with the participation rate unchanged at 65%.

"The market is looking for the number that is not too bad and that probably explains why the Aussie has outperformed the kiwi over the last few days," says Imre Speizer, market strategist at Westpac Banking Corp.

The Reserve Bank of Australia cuts its key interest rate by a quarter of a point to 3.25% last week, citing weaker commodity prices in a global market where the outlook for economic growth "has softened".

The kiwi was little changed on 63.46 euro cents from 63.35 cents at 5pm yesterday as Spanish Prime Minister Mariano Rajoy meets French President Francois Hollande in Paris. Investors are continuing to speculate whether the indebted nation will ask for a bailout from the European Stabilisation Fund.

"Most risk currencies globally have suffered today. Global sentiment towards Europe remains negative," Mr Speizer says. "Spain, Greece and global growth continue to depress risk."

The local currency was little changed after the government's annual accounts were worse than forecast in the May budget after a writedown in the value of KiwiRail weighed on the books, even as the Crown reaped more in company taxes.

The operating balance before gains and losses was a deficit of $9.24 billion in the year ended June 30, worse than the $8.44 billion shortfall expected by Treasury.

New Zealand guest nights rose 2.6% to 2.6 million in August compared to July as the number of Kiwis checking into local accommodation offset a decrease in international guest nights. The rise came from a 3.2% increase in domestic guest nights to 1.6 million.

Statistics New Zealand will release the September food price index tomorrow, followed by the ANZ-Roy Morgan Consumer Confidence survey and the Bank of New Zealand's performance of manufacturing index.

The kiwi fell to 51.04 British pence from 51.28 pence and slipped to 63.90 yen from 64.46 yen.