Kiwi dollar remains near five-month low against aussie

Photo / Dean Purcell

The New Zealand dollar continues to struggle against its Australian counterpart following hawkish comments from the Reserve Bank of Australia (RBA).

It was around a five-month low against the aussie, buying A76.82 at 8am today, compared to A77.04c at 5pm yesterday. It had recovered from a low of A76.80 early yesterday.

While the Australian dollar gained more strength against the greenback after the RBA said interest rates were likely to rise to contain inflationary pressures from the mining sector.

The aussie touched a new high, buying US95.33 at 8am, passing yesterday's two-year high of US94.94 - its strongest since mid-2008.

The next RBA rate rise could be as soon as next month, contrasting the Reserve Bank of New Zealand, which is expected to remain on hold until early next year.

In ANZ's morning report, it said "yesterday's RBA meeting minutes maintained the downward pressure for the New Zealand dollar relative to the Australian dollar.

"Higher interest rates in Australia should be a given for markets with the only question remaining as to the timing of the Reserve Bank following. It will not be soon and as such further downside on this cross is likely in the short-term."

The New Zealand dollar recovered against the US dollar, it was at US73.29 at 8am from US72.77 at 5pm yesterday, as the US Federal Reserve this morning said it was prepared to provide additional accommodation if needed to support the economic recovery.

It was a touch weaker against the euro, buying 0.5536 this morning from 0.5557 at 5pm yesterday. It was 62.35 yen from 62.26.

The trade weighted index was steady at 66.96 from 66.85.

- NZPA