NZ dollar pares slide vs. yen on Australian home loan data, domestic outlook

Wednesday 9th April 2014

The New Zealand dollar rose from a two-week low against the yen, tracking the Australian dollar higher after stronger-than-expected home loan data across the Tasman lifted confidence about the Australian economy.

The kiwi rose to 88.81 yen as at 5 pm in Wellington, having fallen as low as 88 yen at the start of the day and from 88.86 yen late yesterday. The local currency edged up to 87.02 US cents from 86.71 cents at 8am and 86.31 cents yesterday.

The kiwi and the Australian dollar rebounded against the yen after Australian government figures showed home-loan approvals rose 2.3 percent in February, beating estimates of 1.5 percent growth. The currencies had weakened earlier after the Bank of Japan unexpectedly announced no additional stimulus for the world's third-largest economy.

"The home loan numbers were a bit stronger and that's encouraged a little bit of buying," said Michael Johnston, senior trader at HiFX. A weak US dollar and strong domestic situation, including a central bank on a tightening cycle, is ensuring "the kiwi looks well supported," he said.

Traders are looking ahead to February employment data in Australia tomorrow, with a strong number likely to push the Australian dollar higher again, taking the kiwi along for the ride, he said.

The New Zealand dollar didn't move much after figures showed growth in retail spending on debit and credit cards stalled in March, driven by a decline in fuel and clothing.

The kiwi rose to 92.82 Australian cents from 92.63 cents at 8am and from 92.92 cents yesterday. The local currency edged up to 63.10 euro cents from 62.82 cents at the start of the day. The trade-weighted index rose to 80.82 from 80.50.

BusinessDesk.co.nz

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