NZ dollar gains vs Aussie as local inflation seen accelerating
By Paul McBeth
Oct. 15 (BusinessDesk) - The New Zealand dollar gained against its trans-Tasman counterpart as investors look to
consumer price data tomorrow expected to show a faster pace of inflation.
The kiwi rose to 91.54 Australian cents as at 8am in Wellington from 91.33 cents on Friday in New York. It was little
changed at 64.98 US cents from 65.06 cents last week.
Economists expect tomorrow's data will show the consumers price index rose at an annual pace of 1.7 percent in the
September quarter due to increasing oil prices, Auckland's regional fuel tax and a weaker currency. That compares to the
Reserve Bank's forecast for annual CPI of 1.4 percent. Governor Adrian Orr has kept the door open for a rate cut,
whereas the Reserve Bank of Australia is seen as more likely to raise its target cash rate.
The kiwi/Aussie cross "attempted to break through support last week but ran out of steam," ANZ Bank New Zealand
economists Sharon Zollner and Philip Borkin said in a note. "With this week’s CPI figures expected to be solid, we see
support levels too far out of reach for now."
The local currency traded in a 24-basis-point range against the greenback on Friday as stocks on Wall Street gained and
the yield on US 10-year Treasuries ended the session at 3.16 percent. Rising US bond yields triggered a one-day sell-off
in global stocks last week and have been a growing support for the greenback.
Local data today include the BNZ-Business NZ performance of services index. Its sister survey, the performance of
manufacturing index, last week showed a slower pace of expansion.
The kiwi traded at 49.64 British pence from 49.55 pence last week and was almost unchanged at 56.25 euro cents from
56.24 cents. It traded at 72.91 yen from 72.98 yen last week and slipped to 4.4954 Chinese yuan from 4.5010 yuan. The
trade-weighted index was at 71.18 from 71.22 last week.
(BusinessDesk)
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