NZ dollar sinks against Aussie

The New Zealand dollar continued to decline against the Australian dollar to its lowest point in nearly a decade after the Reserve Bank of Australia raised interest rates by 25 points today, as expected by many economists.

The kiwi ducked below A76.10c late this afternoon, losing ground as the Australian dollar edged up following the rate decision. The official cash rate across the Tasman is now 4.25 per cent.

The last time the kiwi was this low against the Aussie was in late 2000.

The kiwi also eased against the US dollar, to US70.23c from US70.51c before the Easter holiday. It rose to 0.5234 euro from 0.5218, and gained to 66.00 yen from 65.80, but eased against the pound to 46.15 pence from 46.39p.

The trade weighted index eased to 65.39 from 65.57.

In New Zealand, the Reserve Bank was forecast to raise interest rates in June, and economic data today reinforced that expectation.

Earlier today, a key gauge of business sentiment showed an improvement in optimism well ahead of the reality of economic recovery, but encouraging measures of investment intentions and construction activity.

The New Zealand Institute of Economic Research's (NZIER) Quarterly Survey of Business Opinion showed a seasonally adjusted net 36 per cent of firms surveyed in the March quarter expected conditions to improve over the next six months, compared with 23 per cent the previous quarter.

Also today, the ANZ Commodity Price Index hit a record high in March for the 13th consecutive monthly gain, as world prices improved for logs, among other commodities.

In offshore markets, the euro continued to decline on the back of reports about Greece's ongoing financial crisis, including that Greece wanted to change the deal reached last month on financial aid for the country.

- NZPA