The New Zealand dollar leaped against the Australian dollar today on a combination of good news on this side of the Tasman and disappointing news on the other side.
Higher prices in the latest Fonterra online milkpowder auction bolstered sentiment here, while worse than expected trade data was a disappointment
there.
As a consequence the NZ dollar was at A78.61c at 5pm, up from A78.24c at 8am and A78.11c at the same time yesterday. It has been trading at four month lows.
It rose to US71.28c from US71.14c at 8am and US70.19c at 5pm yesterday.
"The main feature of today's session was some quite strong buying of the NZ dollar against the Australian dollar," said Mike Jones, markets strategist at BNZ.
"We are still seeing the afterglow of a stronger Fonterra auction overnight," he said.
Prices rose 16.9 per cent in Fonterra's auction and the company commented that it appeared to indicate a firmer tone has returned to the market over the last month.
While Australia's trade surplus almost halved in July, as coal exports declined.
The trade surplus fell to A$1.89 billion ($2.4 billion) in July from a revised A$3.44 billion in June, according to the Australian Bureau of Statistics. Analysts expected a A$3.1 billion surplus.
Otherwise the NZ dollar market was pausing for breath after the local currency galloped higher yesterday and on Wednesday night. The market has quickly put the collapse of South Canterbury Finance on Tuesday behind it.
Attention will turn to offshore factors in the next few days as US economic data takes the spotlight.
The NZ dollar also rose to 0.5572 euro from 0.5524 yesterday, and to 59.99 yen from 59.20.
The trade weighted index was 66.38 at 5pm from 65.66 at the same time yesterday.
- NZPA
