NZ dollar may extend drop vs. AUD as iron ore rallies
NZ dollar may extend drop vs. Australian dollar as iron ore prices gain, China recovers
By Paul McBeth
Jan. 7 (BusinessDesk) - The New Zealand dollar may extend its decline against its trans-Tasman counterpart as Australia's currency rallies on rising commodity prices and the prospect of a stronger Chinese economy.
The kiwi fell to 79.17 Australian cents at 5pm in Wellington from 79.35 cents on Friday in New York. It traded at 82.94 US cents from 83.02 cents at 8am and 83.13 cents last week.
Australia's dollar may rally this week as government figures on Wednesday are expected to show consumers lifted their spending 0.3 percent in November from a month earlier, according to a Bloomberg survey, and as Chinese indicators show the world's second biggest economy may not face as steep a slowdown as initially feared. The price of iron ore has climbed about 70 percent in the past four months as Chinese demand for the metal returns.
"Australian retail sales this week should be slightly better than expected, and Chinese data should boost the Aussie dollar more than the kiwi," said Imre Speizer, market strategist at Westpac Banking Corp in Auckland. The New Zealand dollar may extend its decline to 78.75 Australian cents "as the Aussie outperforms," he said.
New Zealand's currency may gain against the greenback this week as traders resume regular service after the abbreviated Christmas and New Year trading weeks after US policymakers got over their partisan differences to reach agreement on the fiscal cliff of US$600 billion in legislated spending cuts and tax increases.
It may trade in a range of 81.80 cents to 84.70 cents this week, with a bias to the upside, according to a BusinessDesk survey of five traders and strategists.
The kiwi traded at 63.54 euro cents at 5pm in Wellington from 63.58 cents on Friday in New York, and was little changed at 51.69 British pence from 51.77 pence last week. The currency fell to 73.05 yen from 73.29 yen last week, and the trade-weighted index slipped to 74.88 from 74.99 on Friday.