NZ dollar gains as Australian data, RBA loom, rises vs. euro

Tuesday 5th March 2013

The New Zealand dollar, recovering from a dip late yesterday, gained as traders await Australian retail sales, current account figures and the Reserve Bank's policy review for a take on the strength of the nation's biggest export market.

The New Zealand dollar rose to 82.72 US cents from 82.11 cents at 5pm in Wellington yesterday. The trade-weighted index climbed to 76.05 from 75.57.

Australia's current account surplus widened to A$15.35 billion in the fourth quarter from A$14.9 billion three months earlier, while retail sales grew 0.4 percent in January, from a 0.2 percent decline in the previous month, according to economists' forecasts. The Reserve Bank of Australia is expected to keep its cash rate at 3 percent and traders will be watching for any change in the language that may dim the prospects for a rate cut.

"If there's any weakness in the data then there may be some limited weakness in the kiwi," said Alex Sinton, senior dealer at ANZ New Zealand. The kiwi still faces headwinds, such as the drought, he added.

The New Zealand dollar rose to 63.49 euro cents from 63.04 cents as the regional currency remained rattled by political impasse in Italy after former comedian Beppe Grillo, whose 5-Star Movement won 25 percent of the vote, said he won't give a vote of confidence to any coalition government.

"The euro is 'Grillocked' at the moment," Sinton said.

The kiwi dollar rose to 76.89 yen from 76.67 yen and was little changed at 54.61 British pence.

BusinessDesk.co.nz

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