NZ dollar jumps against Aussie as weaker Australian trade weighs
By Tina Morrison
Jul. 3 (BusinessDesk) - The New Zealand dollar rose against its Australian counterpart after weaker than expected Australian trade data weighed on sentiment about the company's growth prospects.
The kiwi jumped to 92.92 Australian cents at 8am in Wellington, from 92.58 cents at 5pm yesterday. The local currency advanced to 87.69 US cents from 87.52 cents yesterday.
The Australian dollar dropped after a report showed the country's trade deficit unexpectedly widened to A$1.9 billion in May, matching the largest deficit since November 2012 and almost 10 times wider than the A$200 million shortfall predicted by economists in a Bloomberg survey. Australia's trade position worsened after a fall in exports, particularly to China, the country's largest export market.
"Weakness in the Australian dollar was initially inspired by yesterday afternoon's release of the Australian trade balance," Bank of New Zealand senior market strategist Kymberly Martin said in a note. "As there is no data scheduled on the domestic agenda today, the New Zealand dollar/Australian dollar cross will take its cues from Australian data releases."
Today, traders will be eyeing Australian data on May retail sales and building approvals scheduled for release at 1:30pm New Zealand time.
Reserve Bank of Australia governor Glenn Stevens is scheduled to give a speech to the Australian Conference of Economists and the Econometric Society Australasian meeting in Hobart at 1pm New Zealand time.
Today in China, reports are released on the non-manufacturing PMI and the HSBC Services PMI.
Tonight, the focus will be on the release of key US non-farm payrolls data for June. Expectations for an additional 215,000 payrolls may have ticked higher after last night's US ADP private payrolls report for June beat expectations, said Martin. The ADP report showed 281,000 jobs were added in June, above the 205,000 expected.
The New Zealand dollar advanced to 64.22 euro cents from 64.01 cents yesterday ahead of the European Central Bank meeting today where no change in policy is expected. The local currency edged up to 51.08 British pence from 51.04 pence yesterday and rose to 89.25 yen from 88.91 yen. The trade-weighted index gained to 81.36 from 81.13 yesterday.