Kiwi hits five-year high against Aussie

The New Zealand dollar has touched a fresh five-year high against the Aussie ahead of reports which are expected to confirm the divergence of the two economies.

 
 

The New Zealand dollar has touched a fresh five-year high against the Aussie ahead of reports which are expected to confirm the divergence of the two economies.

The kiwi rose as high as 92.57 Australian cents in local trading on Monday night, and was at A92.14c on Tuesday morning in Wellington, from A92.40c at the Monday close.

The local currency slipped to US82.55c from US82.82c.

The New Zealand dollar has been accelerating away from its Australian counterpart as a slowing economy in Australia and a revival in local growth highlight the divergent interest rate paths of the two nations.

New Zealand government forecasts on Tuesday are expected to show a strengthening local economy is keeping the nation on track to return to fiscal surplus by 2015. Meanwhile in Australia, minutes of the last central bank meeting are likely to show the bank remains cautious about the economic outlook.

“This cross made another new cycle high last night before pulling back,” Mark Smith, senior economist at ANZ New Zealand, said in a note.

“We would expect the data today to reinforce NZD strength with the NZ Half-Year and Economic Fiscal Update expected to remain strong whilst the RBA minutes continue to inject caution.”

The New Zealand government’s forecasts will be released at 1pm while the RBA minutes from its December meeting are scheduled for release in the afternoon.

On Tuesday morning, the New Zealand dollar weakened to 59.99 euro cents from 60.18 cents.

It was little changed at 84.99 yen from 85.05 yen and edged lower to 50.61 British pence from 50.78p.

The trade-weighted index slipped to 77.73 from 77.93.

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