NZ dollar touches fresh 5-year high against Australian dollar ahead of business confidence report

The New Zealand dollar touched a new five-year high against the Australian dollar overnight ahead of a report today which is expected to show the Australian economy continues to lag New Zealand.

The kiwi hit 91.31 Australian cents overnight, and was trading at 90.86 cents at 8am in Wellington from 90.81 cents at 5pm yesterday. The local currency slipped to 82.70 US cents from 82.91 cents yesterday.

The New Zealand dollar has strengthened against its Australian counterpart as a strengthening local economy contrasts with a weaker Australian economy. Traders today will be eyeing a business confidence report in Australia for signs of continued weakness ahead of consumer sentiment survey tomorrow and November's employment report on Thursday.

"The NZD/AUD is where it is because the widening gap between the good news for New Zealand and the bad news for Australia," said Peter Cavanaugh, client advisor at Bancorp Treasury. "Business confidence dropped in October and there is a risk that November will show a continuation of the waning business confidence in Australia."

The NAB Bank survey on Australian business confidence for November is scheduled for release at 1:30pm New Zealand time.

In New Zealand today, data is due on credit card spending for November at 10:45am.

Traders will also be eyeing data today on Chinese retail sales, fixed investment and industrial production for November for signs of how Asia's largest economy is tracking.

The kiwi slipped to 50.34 British pence from 50.74 pence yesterday ahead of data today on UK industrial production in October and October trade. Bank of England governor Mark Carney is speaking at the Economic Club in New York today.

The local currency weakened to 60.18 euro cents from 60.50 cents. European Central Bank president Mario Draghi is scheduled to speak in Italy today.

The New Zealand dollar was little changed at 85.39 yen from 85.32 yen yesterday ahead of a report on Japanese consumer confidence. The trade-weighted index slid to 77.60 from 77.83 yesterday.

(BusinessDesk)