The New Zealand dollar rose to a four-week high against its trans-Tasman counterpart as weaker-than-expected capital spending figures in Australia added to a string of disappointing data. The kiwi also rose after Fonterra Cooperative Group hiked its forecast milk payout.
The kiwi rose as high as 93.16 Australian cents, the highest since Jan. 31, trading at 93.11 cents at 5pm in Wellington from 92.47 cents yesterday. The local currency rose to 83.22 US cents at 5pm from 82.90 cents at 8am, down from 83.30 cents yesterday.
Australian total capital expenditure fell a seasonally adjusted 5.2 percent in the final three months of 2013, according to the Bureau of Statistics, more than economists were expecting and adding to yesterday's weak construction figures. The weak economic data comes after the Reserve Bank of Australia shifted away from an easing bias on monetary policy amid signs of firmer consumer demand and improvement in business conditions and confidence.
"The kiwi/Aussie has been strong all day after that weak capex data was worse than expected and added to a run of poor Aussie data," said Tim Kelleher, head of institutional FX sales at ASB Institutional in Auckland. "If it wasn't for the fact the RBA shifted from an easing bias to neutral, you'd see the Aussie being lower."
New Zealand's currency was boosted by Fonterra Cooperative Group, the world's biggest dairy exporter, lifting its forecast payout to farmers by 35 cents to $8.65 per kilogram of milk solids for the 2013/14 season. It was also supported by government figures showing a near-doubling in exports to China in January underpinning a bigger than expected trade surplus, and inbound net migration at a 10-year high.
