Kiwi trades above A93c

The New Zealand dollar rose against the Australian dollar after domestic terms of trade data surprised on the upside while Australia’s private sector capital expenditure fell short of expectations. The kiwi continued to lose ground against the greenback.

The kiwi traded at A93.18c at 5pm yesterday versus A92.72c on Wednesday. It traded at US72.04c versus US72.24c on Wednesday.

According to the Australian Bureau of Statistics, capex fell a seasonally adjusted 0.2 per cent in the final quarter of last year versus expectations for a rise of 1 per cent. Meanwhile, New Zealand’s merchandise terms of trade rose to a record in the fourth quarter after export prices outran imports as the value of trade in both directions rose.

The kiwi benefited against the Aussie when “the capex disappointed slightly and the terms of trade was better”, said Tim Kelleher, head of institutional foreign exchange sales at ASB Bank.

The New Zealand dollar continued to fall against the US dollar as the greenback benefited from Federal Reserve chair Jerome Powell’s optimistic assessment of the US economy on Wednesday, which stoked speculation the Fed may be more aggressive in hiking interest rates.

“I would call it just grinding lower,” said Kelleher. He said the kiwi has strong resistance at US71.75c, this year’s low. The kiwi traded at 59.07 euro cents from ¤ 59.08c on Wednesday. It traded at 52.37 pence from 51.97p.