The New Zealand dollar rose against the Australian dollar as investors look ahead to reports today which may show the Australian economy is weakening, increasing the likelihood of further interest rate cuts.
The kiwi advanced to 87.50 Australian cents at 8am in Wellington from 87.32 cents at the 5pm market close in Wellington yesterday. The local currency slipped to 80.01 US cents from 80.34 cents yesterday.
Traders will be eyeing Australia's NAB Business Confidence and the Commonwealth Treasury's pre-election economic and fiscal outlook today for signs of a slowdown and the possibility of further interest rate cuts ahead. Australia's Reserve Bank last week cut the benchmark rate a quarter point to a record low 2.5 per cent, aligning it with New Zealand's key rate.
"Australian data will be in focus today with business confidence and the pre-election economic and fiscal outlook," Mark Smith, a senior economist at ANZ New Zealand, said in a note. "These events are forecast to be a supportive for the NZD/AUD."
The Australian Treasury's fiscal outlook is scheduled for release at midday New Zealand time, and the business survey at 1:30pm.
