The New Zealand dollar rose against its Australian counterpart after weaker than expected Australian trade data weighed on sentiment about the country's growth prospects.
The kiwi jumped to 92.92 Australian cents at 8am in Wellington, from 92.58 cents at 5pm yesterday. The local currency advanced to 87.69 US cents from 87.52 cents yesterday.
The Australian dollar dropped after a report showed the country's trade deficit unexpectedly widened to A$1.9 billion in May, matching the largest deficit since November 2012 and almost 10 times wider than the A$200 million shortfall predicted by economists in a Bloomberg survey. Australia's trade position worsened after a fall in exports, particularly to China, the country's largest export market.
"Weakness in the Australian dollar was initially inspired by yesterday afternoon's release of the Australian trade balance," Bank of New Zealand senior market strategist Kymberly Martin said in a note. "As there is no data scheduled on the domestic agenda today, the New Zealand dollar/Australian dollar cross will take its cues from Australian data releases."
Today, traders will be eyeing Australian data on May retail sales and building approvals scheduled for release at 1:30pm New Zealand time.
