The New Zealand dollar rose after the nation's terms of trade rose to their second highest level ever in the September quarter.

The domestic currency's gains were buttressed by downbeat data in Australia on housing consents and job advertisements.

The kiwi was trading at 64.46 US cents at 5pm in Wellington from 64.30 at 8am while the trade-weighted index was at 71.48 from 71.31.

New Zealand's terms of trade, a measure showing the purchasing power of New Zealand's exports relative to imports, jumped 1.9 per cent in the three months ended September, nearly double the 1 per cent gain economists had been expecting and the largest quarterly increase since March 2016.


The terms of trade are now within a whisker of their record level set in December 2017.

"Like the data we got last week on retail sales and business confidence, the lift in the terms of trade was greater than markets were expecting," said Peter Cavanaugh, the senior client advisor at Bancorp Treasury Services.

"The New Zealand economy's running hot and that's lifted the New Zealand dollar," he said.

That wasn't the case across the Tasman where Australia's housing consents fell 8.1 per cent in October while job ads fell 1.7 percent in November, a worrying sign for employment which suffered its biggest drop in three years in October.

Nevertheless, the market isn't expecting the Reserve Bank of Australia will cut interest rates tomorrow when it reviews monetary policy for the last time this year.

The RBA's cash rate stands at 0.75 per cent and the market is expecting it will cut that to 0.5 per cent in February next year.

However, New Zealand's Reserve Bank is expected to hold its official cash rate steady at 1 per cent at its next review in February, with the contrast enhancing the perceived value of New Zealand dollars.

The New Zealand dollar was trading at 95.12 Australian cents from 94.95 this morning, at 58.50 euro cents from 58.32, at 49.92 British pence from 49.80, at 70.71 yen from 70.43 and at 4.5308 Chinese yuan from 4.5208. The two-year swap rate edged up to a bid price of 1.1704 per cent from 1.1326 per cent on Friday, while 10-year swaps rose to 1.5400 per cent from 1.4800 per cent.