The kiwi was little changed at 84.15 US cents at 8am in Wellington from 84.13 cents at 5pm yesterday.
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 advanced against its Australian counterpart ahead of business confidence surveys in both countries today which may show the divergent paths of the two economies.
The kiwi rose to 88.22 Australian cents at 8am in Wellington from 87.95 cents at the 5pm market close yesterday. The localcurrency advanced to 83.30 US cents from 82.85 yesterday.
The New Zealand Institute of Economic Research's Quarterly Survey of Business Opinion Survey in New Zealand today is expected to show business confidence remained strong in the third quarter, while the weaker Australian economy may be reflected in that nation's NAB Business Confidence survey today.
"That could really highlight the differences between the two economies," said Kevin Morgan, senior dealer at OM Financial. "If that is the case we would probably see that most expressed in the rate of the kiwi versus the Aussie. We had a brief dip below 88 Australian cents. A strong QSBO here and a muted one from Australia could see that kiwi/Aussie head up towards 89 cents again."
The QSBO, released at 10am, should be "relatively upbeat", Morgan said. "On a relative basis we are doing extremely well."
The Australian survey, scheduled for release at 1:30pm New Zealand time, may show that economy is still waiting for the effects of lower interest rates to feed through, Morgan said.
Traders are expecting the Reserve Bank of Australia to reduce the benchmark interest rate by 5 basis points over the next year, while New Zealand's central bank is expected to increase rates by 72 basis points over the same period, according to the Overnight Index Swap curve.
Meanwhile, the US dollar index, which measures the greenback against a basket of currencies, declined as Congress remained gridlocked over the budget and the Oct. 17 deadline approaches for the US to increase the nation's borrowing limit or risk a debt default.
The kiwi is probably headed up to 84 US cents over the next week or so, said OM Financial's Morgan.
"People are looking for a bit of yield around the world and all the data recently from New Zealand has been extremely positive and on a background of a weaker US dollar it is not surprising to see funds flow back into this part of the world," Morgan said.
The New Zealand dollar advanced to 80.69 yen at 8am in Wellington from 80.48 yen at the 5pm market close yesterday.
The kiwi rose to 61.34 euro cents from 61.08 cents yesterday and increased to 51.75 British pence from 51.67 pence. The trade-weighted index gained to 77.14 from 76.86 yesterday.
