The kiwi was little changed at 84.15 US cents at 8am in Wellington from 84.13 cents at 5pm yesterday.
The New Zealand dollar rose above 90 Australian cents for the first time in five years as traders bet the Reserve Bank of Australia will attempt to talk its currency down at its policy review this afternoon.
The kiwi touched a high of 90.03 Australian cents early this morning, a
level not reached since October 2008. The local currency was trading at 89.82 Australian cents at 8am in Wellington from 89.56 cents at the 5pm market close yesterday. The kiwi slipped to 81.71 US cents from 81.94 cents yesterday.
Trade data yesterday supports evidence of an economic revival which will push interest rates higher. The kiwi has been advancing against its trans-Tasman counterpart as Australian central bank officials try to talk down the value of their currency in an attempt to boost economic growth. The RBA will release its latest statement at 4:30pm.
"The kiwi/Aussie has blown out overnight," said Stuart Ive, senior client advisor, foreign exchange and derivatives at OM Financial. "Everyone is expecting the RBA to effectively jawbone their currency lower. The markets may be positioning themselves a little bit for this afternoon, hoping that within the RBA statement they continue their bearish tone."
OM Financial's Ive said the kiwi faces near term resistance at 90.85 Australian cents.
Central bank officials in New Zealand and Australia are betting their currencies will move lower as the US Federal Reserve pulls back on its US$85 billion a month bond buying programme, Ive said. Still, better economic data in both countries is proving a headwind to lower currencies, he said.
