Kiwi dollar little changed as equities rally

The kiwi traded at US68.86c at 5pm yesterday. Photo / NZME

The New Zealand dollar is little changed after better-than-expected Australian data, on top of better manufacturing data from China over the weekend, fuelled equity market rallies around Asia.

The kiwi was trading at 68.22 US cents at 5pm in Wellington from 68.29 at 8am. The trade-weighted index was at 73.98 points from 74.07.

The benchmark S&P/NZX 50 Index rose nearly a percent to a fresh record.National Australia Bank's latest survey found that perceptions of business conditions, driven by improvements in profitability, trading conditions and hiring, improved to 7 points in March from 4 points in February.

Despite that, NAB's headline business confidence index fell to zero, its lowest level since January 2016."Australian data has been better and equities markets are having a strong performance as well. It's risk-on at the moment," says Tim Kelleher, head of institutional foreign exchange sales at ASB Bank.

The Australian data followed Chinese March official manufacturing PMI, which came in at 50.5 points from 49.2 in February.

Economists had expected a figure around 49.7.Kelleher says the market's ignoring Brexit developments for the moment.

"No one knows what the hell's going on anyway."Britain's parliament has rejected Prime Minister Theresa May's Brexit plan three times now.

A series of "indicative" votes on Brexit alternatives is planned in the House of Commons overnight, New Zealand time.However, it is looking increasingly like Britain will crash out of the European Union on April 12, something parliament has said it doesn't want to happen.

The kiwi was trading at 52.35 British pence from 52.37 this morning and at 60.75 euro cents from 60.78. The Reserve Bank of Australia is set to deliver its latest monetary policy decision tomorrow afternoon.

Kelleher says nobody expects any change in Australia's cash rate but the commentary could impact currency trading.

The New Zealand dollar was at 95.87 Australian cents from 95.90, at 75.78 Japanese yen from 75.79 and at 4.5752 Chinese yuan from 4.5837. New Zealand two-year swap rate rose to 1.6197 percent from 1.6156 on Friday; the 10-year rate rose to 2.1775 percent from 2.1450, having reached a record low of 2.02 percent on Thursday.