The New Zealand dollar is slightly weaker after trying to rally with its trans-Tasman counterpart after the Reserve Bank of Australia held its cash rate steady and maintained its 3 percent growth forecast for Australia’s economy this year.
The kiwi was trading at 67.98 US cents at 5pm in Wellington from 68.18 at 8am, and at 96.07 Australian cents from 96.19. The trade-weighted index was at 73.76 points from 73.94.
The RBA said Australia’s economy slowed over the second half of 2018 but that the growth outlook is being supported by rising business investment, higher levels of spending on public infrastructure and increased employment.
It also noted the “welcome development” of some pick-up in wages growth.
“It was fairly samey – there’s nothing really new in there,” says Mitchell McIntyre, a dealer at XE. “We did see a little rally on the back of it, but it was fairly short-lived.”
McIntyre says today’s Australian December quarter current accounts data is pointing to a weak GDP print when that data is released on Wednesday at 1.30pm New Zealand time.
According to the Australian Bureau of Statistics, net exports will detract 0.2 percentage points from tomorrow’s GDP data, increasing the risk of a flat outcome or, potentially, a negative quarterly print.
Markets had been expecting net exports to only detract 0.1 percentage points from growth.
While most economists are expecting the GDP figure to come in at 0.4-0.5 percent for the quarter, Commonwealth Bank of Australia economists are picking just 0.2 percent, which would take annual GDP to 2.4 percent.
The New Zealand dollar was trading at 51.68 British pence from 51.75 British pence, at 60.02 euro cents from 60.13, at 76.06 yen from 76.16 yen and at 4.5566 Chinese yuan from 4.5718.
The two-year swap rate was at 1.8400 percent from 1.8549 percent on Monday and the 10-year swap rate was at 2.4780 percent from 2.5025 percent.