NZ dollar falls vs Aussie, recovers against US

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NZN

The New Zealand dollar declined against its trans-Tasman counterpart today and pared earlier losses against the greenback as the US dollar fell out of favour in the run-up to tomorrow's inflation release in the US.

A mixture of New Zealand Bank notes and coins.

New Zealand currency (file picture).

Source: istock.com

The kiwi dropped to A92.29c at 5pm in Wellington from 92.76c today and traded at US72.62c from 72.68c, recovering from a dip earlier in the day.

The greenback fell out of favour late in the Asian trading session as investors prepare for the US consumer prices index tomorrow for a steer on whether Federal Reserve will raise interest rates next month.

The Australian dollar outperformed the kiwi, having largely ignored an upbeat NAB business confidence survey that underscored growing economic momentum across the Tasman.

"Interest rate markets have slightly more of a chance of the Reserve Bank of Australia hiking than the RBNZ over the course of 2018," said Michael Johnston, senior trader at HiFX.

"The kiwi/Aussie's been up in the high 92s, 93s and that's rarefied air in this day and age."

Mr Johnston said the kiwi may gain a little against the greenback in the run-up to Wednesday's US CPI release, but if inflation is strong, then the US dollar "will make further gains".

The Reserve Bank of New Zealand's survey of inflation expectations Wednesday will be closely watched for any signs inflationary pressures may be emerging.

The kiwi dollar was almost unchanged at 52.46 British pence from 52.45 pence late Monday and traded at 59.06 euro cents form 59.15c. It rose to 4.9532 Chinese yuan from 4.5810 yuan and fell to 78.82 yen from 79.02 yen.

The trade-weighted index was at 74.62 from 74.72.

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