New Zealand dollar follows Aussie lower

Trade figures across the Tasman weighed on the outlook for the antipodean commodity currencies. Picture / Kenny Rodger

The New Zealand dollar followed its Australian counterpart lower after trade figures across the Tasman weighed on the outlook for the antipodean commodity currencies.

The kiwi declined to US68.60c at 5pm from US68.76c at 8am and US68.96c yesterday. The trade-weighted index fell to 72.56 from 72.83 yesterday.

The Australian dollar fell 0.2 per cent in local trading after Australian Bureau of Statistics showed a smaller trade surplus than expected at with Australia posted a seasonally adjusted trade surplus of A$105 million in October, well short of the A$1.4 billion surplus economists expected.

Meantime the greenback remained well bid as the Bank of Canada's interest rate review and ongoing issues for the UK in extracting itself from the European Union sapped appetite for alternative currencies.

"The disappointing Aussie trade data pushed the Aussie-US lower and the kiwi slipped in sympathy," said Westpac Banking Corp senior strategist Imre Speizer.

US dollar strength was largely due to other factors such as Bank of Canada keeping its benchmark interest rate at 1 per cent and "Brexit divorce bill related issues", which have weighed on the euro and British pound in recent sessions, giving the greenback a lift, he said.

Speizer said news that Fonterra Cooperative Group cut its forecast farmgate payout on weak global dairy prices won't have helped the kiwi, although it was a widely expected move and in line with forecasts. Fonterra lowered its forecast payment to farmers by 35c to $6.40 per kg of milksolids.

Looking ahead, he said the main focus will now be on Friday's nonfarm payrolls data in the US, with economists expecting growth of 195,000, according to economists surveyed by DowJones Newswires.

Any progress on tax reform legislation in the United States and a potential US government shutdown if Congress fails to agree on a spending package before the deadline midnight Friday, is also being closely watched.

The local currency eased to A90.85c from A90.93c and to 51.25p from 51.32p yesterday and fell to 58.09 euro cents from 58.22 cents. It declined to 77.09 yen from 77.37 yen yesterday and to 4.5367 Chinese yuan from 4.5617 yuan.

New Zealand's two-year swap rate was unchanged at 2.14 per cent while the 10-year swap rate was unchanged at 3.07 per cent.