Kiwi declines against Aussie

Tuesday 1st February 2011

The New Zealand dollar declined against the Australian dollar today, but recovered some ground against the euro and US dollar after overnight declines.

The aussie received a boost late this afternoon after the Reserve Bank of Australia issued a positive outlook for the Australian economy and left its benchmark interest rate at 4.75%, predicting damage from massive flooding in Queensland would be temporary.

Analysts do not expect further rate rises across the Tasman for at least several more months. In New Zealand, the Reserve Bank is tipped to leave rates at the current 3% until at least June.

By 5pm, the kiwi was at A77.36c, below A77.71c late yesterday afternoon.

The kiwi rose against the greenback to US77.42c, from US7.13c late yesterday afternoon. It was at US77.22c earlier this morning.

The currency rose a touch after data was released late this morning showing solid growth in wages in the three months to December 31, but slight softness in the labour market.

The Household Labour Force Survey, the official measure of unemployment, is released on Thursday.

Other domestic data released today included the monthly ANZ Commodity Price Index, which measures international prices for key commodities produced by New Zealand. The index reached a record high in January on broad gains in commodity prices, and the local currency index also gained despite a rise in the New Zealand dollar against key trading partners last month.

The currency eased to 0.5642 euro from 0.5671 euro yesterday, and to 48.21 pence from 48.62p but firmed to 63.45 yen from 63.28.

The trade weighted index softened to 68.79 from 68.91.

The euro recovered a little today after the increased prospect of a rate hike rose following higher inflation in Europe, and on easing fears about unrest in Egypt.

NZPA

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