The New Zealand dollar rose against the Australian dollar as investors look ahead to reports today which may show the Australian economy is weakening, increasing the likelihood of further interest rate cuts.
The kiwi advanced to 87.50 Australian cents at 8am in Wellington from 87.32 cents at the 5pm market close in Wellington yesterday. The local currency slipped to 80.01 US cents from 80.34 cents yesterday.
Traders will be eyeing Australia’s NAB Business Confidence and the Commonwealth Treasury’s pre-election economic and fiscal outlook today for signs of a slowdown and the possibility of further interest rate cuts ahead. Australia’s Reserve Bank last week cut the benchmark rate a quarter point to a record low 2.5 percent, aligning it with New Zealand’s key rate.
“Australian data will be in focus today with business confidence and the pre-election economic and fiscal outlook,” Mark Smith, a senior economist at ANZ New Zealand, said in a note. “These events are forecast to be a supportive for the NZD/AUD.”
The Australian Treasury’s fiscal outlook is scheduled for release at midday New Zealand time, and the business survey at 1:30pm.
In the US tonight, traders will be eyeing a report which is expected to show the pace of retail spending slowed to 0.3 percent in July from 0.4 percent the previous month.
The New Zealand dollar slipped to 77.49 yen at 8am in Wellington from 77.51 yen yesterday. The local currency weakened to 60.17 euro cents from 60.30 yesterday and dropped to 51.76 British pence from 51.87 pence. The trade-weighted index slid to 75.26 from 75.36 yesterday.