Kiwi rises high against aussie
The New Zealand dollar has traded today against the Australian currency at highs not seen for nearly five years.
The kiwi is now trading at A86.07 cents after pushing as high as A86.23c earlier in the day.
These elevated levels, which follow a drop in Australian business confidence, have not been reached since the end of 2008.
While the news was great for New Zealanders crossing the Tasman for a holiday, exporters would not be welcoming the kiwi's unrelenting highs against the aussie.
BNZ market strategist Mike Jones said the kiwi was likely to push higher on the cross towards A88.50c by the end of the year.
The Australian dollar had dipped after a drop in consumer confidence because of the weakening mining sector and a spate of positive United States data, including a rise in corporate earnings and a drop in jobless claims, he said.
OM Financial senior foreign exchange adviser Stuart Ive said Australian consumer confidence index data released yesterday, showing a fall from two in the first quarter to minus one in the second quarter, added to the expectation that the Reserve Bank of Australia would cut interest rates from 2.75 per cent.
While New Zealand's ANZ-Roy Morgan confidence survey showed a slight dip in confidence here, the New Zealand central bank was expected to raise interest rates from 2.5 per cent as the economy gained momentum, he said.
The kiwi was likely to push higher still, Ive said.
BNZ expected the kiwi to push through the recent highs of about A86.30 before long.
The kiwi continues to perform well against the greenback as markets watch the Federal Reserve chairman's every move for an indication of when the US will start to taper its $85 billion-a-month (NZ$107b) bond-buying programme.
The kiwi was trading at US79.09c in this afternoon's trading.
"The kiwi held its own against the US dollar," Ive said.
All eyes would be on the Japanese upper-house election tomorrow and next week's Reserve Bank official cash rate announcement, he said.