NZ dollar follows Aussie lower on weak Australian trade data

Article – BusinessDesk

Dec. 7 (BusinessDesk) – The New Zealand dollar followed its Australian counterpart lower after trade figures across the Tasman weighed on the outlook for the antipodean commodity currencies.NZ dollar follows Aussie lower on weak Australian trade data

By Rebecca Howard

Dec. 7 (BusinessDesk) – The New Zealand dollar followed its Australian counterpart lower after trade figures across the Tasman weighed on the outlook for the antipodean commodity currencies.

The kiwi declined to 68.60 US cents as at 5pm in Wellington from 68.76 cents at 8am and 68.96 cents yesterday. The trade-weighted index fell to 72.56 from 72.83 yesterday.

The Australian dollar fell 0.2 percent in local trading after Australian Bureau of Statistics showed a smaller trade surplus than expected at with Australia posted a seasonally adjusted trade surplus of A$105 million in October, well short of the A$1.4 billion surplus economists expected. Meantime the greenback remained well bid as the Bank of Canada’s interest rate review and ongoing issues for the UK in extracting itself from the European Union sapped appetite for alternative currencies.

“The disappointing Aussie trade data pushed the Aussie-US lower and the kiwi slipped in sympathy,” said Westpac Banking Corp senior strategist Imre Speizer. US dollar strength was largely due to other factors such as Bank of Canada keeping its benchmark interest rate at 1 percent and “Brexit divorce bill related issues,” which have weighed on the euro and British pound in recent sessions, giving the greenback a lift, he said.

Speizer said news that Fonterra Cooperative Group cut its forecast farmgate payout on weak global dairy prices won’t have helped the kiwi, although it was a widely expected move and in line with forecasts. Fonterra lowered its forecast payment to farmers by 35 cents to $6.40 per kilogram of milk solids.

Looking ahead, he said the main focus will now be on Friday’s nonfarm payrolls data in the US, with economists expecting growth of 195,000, according to economists surveyed by DowJones Newswires. Any progress on tax reform legislation in the United States and a potential US government shutdown if Congress fails to agree on a spending package before the deadline midnight Friday, is also being closely watched.

The local currency eased to 90.85 Australian cents from 90.93 cents and to 51.25 British pence from 51.32 pence yesterday and fell to 58.09 euro cents from 58.22 cents. It declined to 77.09 yen from 77.37 yen yesterday and to 4.5367 Chinese yuan from 4.5617 yuan.

New Zealand’s two-year swap rate was unchanged at 2.14 while the 10-year swap rate was unchanged at 3.07 percent.

(BusinessDesk)

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