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NZ dollar holds in recent range ahead of Australian data

Thursday 17th January 2013

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The New Zealand dollar was trading near 84 US cents on Thursday morning after dipping in overnight trading as traders awaited Australian employment data today.

The kiwi was at 84.01 cents at 8am, little changed from 84.06 US cents at 5pm on Wednesday. It dipped toward 83.65 cents overnight.

A 1.1 percent rise in dairy prices in a Fonterra online auction and positive results from US banks bolstered sentiment in a market that had had a risk-off tone on Wednesday on confusing signals about monetary policy in Japan.

"The kiwi-US(dollar cross-rate) is well within the recent ranges," Dan Bell, currency strategist at HiFX said.

He said the kiwi could rise against the Australian dollar if the unemployment rate in Australia rises to more than the expected 5.4 percent in December. The data is due at 1.30pm NZ time.

At the moment the market isn't pricing in another rate cut from the Reserve Bank of Australia in February but if the unemployment rate is worse than expected the chances of a rate cut increase.

"If we see worse-than-expected employment figures we will see the New Zealand-Aussie cross push up and probably break through 80 Australian cents," Bell said.

It was at 79.49 Australian cents at 8am from 79.63 on Wednesday. HiFX expects the cross to trend higher in the next three months on interest rate differentials between the two countries.

The kiwi was at 74.39 yen from 74.02 yen on Wednesday. It was at 63.16 euro from 63.28 euro and at 52.46 British pence from 52.34. The trade-weighted index was at 75.32 from 75.30.

 

BusinessDesk.co.nz

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