NZ dollar falls vs. Australian counterpart as RBA minutes, speech loom
By Paul McBeth
Nov. 19 (BusinessDesk) - The New Zealand dollar fell against its Australian counterpart as investors prepare for the minutes from this month's Reserve Bank of Australia policy meeting and a speech from governor Glenn Stevens tomorrow.
The kiwi fell to 78.38 Australian cents at 5pm in Wellington from 78.54 cents on Friday in New York. It increased to 81.34 US cents at 5pm from 81.17 cents at 8am and 81.21 cents last week.
The RBA unexpectedly kept the target cash rate unchanged at 3.25 percent this month in the face of a strong Australian currency and as the global economy brightened a little. Better-than-expected Chinese retail sales stoked optimism Australia may be able to keep riding on the coat-tails of the world's second-biggest economy and traders will be looking for any insight as to how the RBA board and governor Stevens see domestic economic conditions.
"The Australian economy is still more sensitive to China than us (and if Chinese figures beat expectations this week), it should benefit them more," said Imre Speizer, market strategist at Westpac Banking Corp. "The kiwi/Aussie cross has possibly ended its multi-week correction, but it's not conclusive."
Speizer has a negative bias for the kiwi dollar this week due to the political ructions over the United States' fiscal cliff of US$607 billion in automatic spending cuts and tax hikes, concerns about European growth and the indebtedness of its members, and New Zealand's own slowing economic indicators. The kiwi may trade between 80.50 US cents and 82 cents this week, he said.
New Zealand's services sector grew at its fastest monthly pace in at least five years in October, according to the BNZ-Business NZ performance of services index. The composite index, which combines the services index with its manufacturing sister series, indicates annual growth of about 3 percent.
Government figures showed producers' input and output prices both fell in the third quarter, confirming last month’s inflation figures showing the consumer price index rose a smaller-than-expected 0.3 percent in the third quarter
The kiwi was little changed at 24.94 Thai baht from 24.13 baht last week after Thailand's growth slowed to 3 percent in the three months ended Sept. 30 from a pace of 4.4 percent in June quarter.
The kiwi dollar rose to 66.08 yen from 65.96 yen, having climbed last week on speculation Japan’s opposition party could win elections next month and work harder to weaken the Japanese currency.
The trade-weighted index was unchanged at 73.09. The kiwi bought 63.72 euro cents at 5pm in Wellington from 63.74 cents last week and traded at 51.09 British pence from 51.10 pence.