The New Zealand dollar is little changed against the Australian dollar before the release of minutes from the Reserve Bank of Australia's last meeting which may signal whether Australian interest rates will remain on hold or fall further.
The kiwi was at 87.61 Australian cents at 8am in Wellington, from 87.77 cents at the 5pm market close yesterday. The local currency rose to 81.62 US cents, from 81.88 cents yesterday.
The New Zealand dollar has risen about 10 per cent against its Australian counterpart so far this year as a strengthening New Zealand economy increases the likelihood of an interest rate hike while a slowdown in mining in Australia has prompted that nation's central bank to reduce rates. Traders will be eyeing the release of the Australian central bank's minutes for indications on whether further rate cuts are likely after the bank's last statement suggested they may be on hold.
"The Reserve Bank of Australia minutes will be a driver for the NZD/AUD today with confirmation of the RBA easing bias supportive for the cross," ANZ New Zealand senior economist Mark Smith said in a note. "While interest rate sensitive pockets of the economy are picking up, sharply lower mining investment is looming. ANZ sees the risk of a late 2013 cut in the cash rate and no increase before 2015."
The minutes of the RBA's September meeting are scheduled for release at 1:30pm New Zealand time.
