NZ dollar slips as Aussie dollar tumbles

October 28 - Close

The New Zealand dollar followed the Australian dollar lower today but tomorrow the focus will be on the Reserve Bank of New Zealand's interest rate review.

By 5pm the NZ dollar was buying US73.82c, down from US74.53c at 8am and US74.76c at 5pm yesterday.

The NZ dollar traded as high as US74.64c before heading lower.

"Basically we followed the aussie," a dealer said.

The Australian dollar fell after investors decided that Australian inflation data was not strong enough to warrant a big increase in Australian interest rates, which are next reviewed on Melbourne Cup day.

"I would say the outcome is probably more in line with a 25 basis point move than a 50 point move," Michael Blythe, chief economist at Commonwealth Bank, said.

The Australian dollar fell from above US92c to be US90.91c by 5pm in New Zealand.

The NZ dollar was little changed against the Australian dollar at A81.20c from A81.37c at the same time yesterday.

The Reserve Bank of New Zealand is expected to leave its official cash rate unchanged at 2.5 per cent at its review at 9am local time tomorrow but investors are watching for any change in stance in the accompanying words.

Business confidence was little changed in September in the latest National Bank of New Zealand Business Outlook survey today. The survey can move markets but did not do so today.

The NZ dollar was at 0.4982 euro from 0.5024 at 5pm yesterday and at 67.35 yen from 68.85 yen yesterday.

The trade weighted index was 66.49 at 5pm from 67.22 at the same time yesterday.

- NZPA