NZ dollar gains against Australian dollar
Mon, 03 Sep 2012 8:46p.m.
By Paul McBeth
The New Zealand dollar gained against its Australian counterpart after figures showed dwindling retail sales across the Tasman and as China, Australia's biggest buyer of raw materials, reported tepid manufacturing activity.
The Kiwi climbed to 77.92 Australian cents at 5pm from 77.82 cents at 8am and 77.73 cents on Friday. The Kiwi was little changed at 80.08 US cents at 5pm from 79.95 cents at 8am, down from 80.32 cents last week.
The Australian dollar fell after government figures showed retail sales fell 0.8 percent in July, the biggest decline since October 2010 and short of the 0.2 percent growth expected by economists.
This came after the HSBC purchasing managers' index showed the biggest contraction in Chinese manufacturing since March 2009.
"Things have turned around in the Kiwi's favour and it looks like it will head higher (against the Australian dollar) over the next week," said Imre Speizer, market strategist at Westpac.
The Reserve Bank of Australia will review monetary policy on Tuesday and is expected to keep the target cash rate at 3.5 percent.
The central bank has been reluctant to cut rates too quickly with inflation close to target and growth near trend.
New Zealand's terms of trade fell 2.6 percent in the second quarter, due to sliding dairy prices and rising imported petroleum costs, according to government figures.
Mr Speizer said the New Zealand dollar will probably fall to 78 US cents this week with the deteriorating picture emerging in China, and may head towards the mid-70s this month.
Three out of five analysts surveyed by BusinessDesk predict the Kiwi will fall this week.
The New Zealand dollar decreased to 63.71 euro cents from 63.85 cents at the close of trading in New York on Friday and declined to 50.44 British pence from 50.60 pence. It fell to 62.71 yen from 62.90 yen, and edged down to 72.03 on a trade-weighted basis from 72.13 last week.
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3/09/2012 11:04:47 p.m.
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