Kiwi dollar pushes above 70c

The New Zealand dollar pushed back above 70 US cents for the first time in a week and a half after data showed Australian unemployment continued to shrink last month, while the European Union moved towards a bail-out for debt-stricken Greece.

Australian unemployment unexpectedly shrank to 5.3 per cent last month as the so-called 'lucky country' continued its run of good news after it avoided falling into a recession last year.

The data boosted support for the Australian dollar, which climbed above 89 US cents for the first time in almost two weeks, and dragged the kiwi dollar along with it.

Investors' appetite for riskier, higher-yielding assets improved after the EU pledged conditional support for Greece, which is struggling to contain its fiscal deficit.

"The Australian numbers were three times above market expectations, and it wasn't surprising to see a pop in the Aussie dollar, which dragged the kiwi as well," said Khoon Goh, senior markets economist at ANZ National Bank.

"The European countries looking like they're going to help Greece out has taken some uncertainty out of the market" which buoyed investor sentiment, he said.

The kiwi dollar climbed to 70.04 US cents from 69.95 cents yesterday, and was little changed at 64.77 on the trade-weighted index, a basket of five trading partners' currencies, from 64.70.

The kiwi dropped to 62.82 yen from 62.96 yen yesterday, and fell to 78.60 Australian cents from 78.74 cents. It gained to 51.17 euro cents from 50.82 cents yesterday, and slipped to 44.62 pence from 44.89 pence.

Goh said the currency may trade between 69.60 US cents and 70.25 cents today, and may get pushed higher by its Australian counterpart, though this would be pared back as local investors focus on domestic factors.

The unemployment data "shows the big divergence between the countries' central banks," Goh said.

The market is picking the Reserve Bank of Australian to hike rates by 25 basis points in April, but has virtually written off an early hike by New Zealand's central bank after weak labour data and a softening property sector remove the pressure from Governor Alan Bollard to act early.

Retail data out today is expected to show sales grew 0.5 per cent in December from a month earlier with increasing volumes for the quarter, though Goh said this is "probably on the back of aggressive retail discounting."

Spending on electronic cards in January rose 0.5 per cent in January, but was propped up by spending on motor vehicle-related industries.

The Real Estate Institute will release its report on house sales in January, though it accidently put up the data on its website this week, showing the median price of residential homes dropped to $350,000, with the number of sales tumbling 17 per cent to 4,488.