Kiwi hitches lift on rising Aussie dollar

The New Zealand dollar held onto gains this afternoon after the Reserve Bank of Australia left interest rates on hold, as expected, across the Tasman.

The RBA is not expected to raise rates again in a hurry, although it may move again before the end of the year. Its accompanying statement to the third consecutive no-change was fairly neutral, although it contained a mildly hawkish economic view.

The aussie hit a three-month high on the release of the decision at 4.30pm NZT before tailing off a touch.

The kiwi received a boost from the Australian dollar's gains, and made ground on the cross-rate.

By 5pm, the kiwi was at US73.35c, from US72.82c at the same time yesterday, and slightly firmer than its early morning level of US73.26c.

Against the aussie, the kiwi was at A80.50c from A80.14c late yesterday afternoon.

The kiwi was little changed after 24 hours against the euro at 0.5568, and weaker against the yen and sterling, at 63.38 yen from 63.99 and 46.20p from 46.34p respectively.

The trade weighted index firmed on the back of the US dollar gains, to 67.78 from 67.57.

Earlier in the session, the kiwi got a small boost from data showing a slight improvement in second quarter wage growth, pointing to a continued recovery but no major inflationary pressure from the labour market yet.

Key domestic data this week include Fonterra's milk powder auction results tomorrow, and the official employment indicator, the Household Labour Force Survey, on Thursday.

Across Asia, stocks rose to nearly three-month highs on the back of earlier European bank results and indications of strength in the US economy.

- NZPA