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Tech & Science High flying kiwi dollar leaves Aussie in the dust

06:10  06 december  2019
06:10  06 december  2019 Source:   reuters.com

The fall of property prices and a weak dollar has wiped more than 120,000 Aussie millionaires off the face of the earth

  The fall of property prices and a weak dollar has wiped more than 120,000 Aussie millionaires off the face of the earth Australia is $US443 billion poorer this year after fallen house prices and a depreciating dollar wiped the country's wealth, according to the latest Credit Suisse report.A sustained property boom largely helped elevate the status of many of our countrymen and women to millionaires, on paper at least.

After flying high for several years, the Australian dollar has taken it on the chin Down Under, mostly due to worries over China. Dow Jones FX Trader

The climb of the kiwi dollar against the Aussie has renewed prospects of currency parity. Tim Kelleher, head of institutional FX sales NZ at ASB Institutional said the kiwi was heading towards the 97c-to 98c range as the Australian dollar , was weakened by hedge trading and weak Chinese

Australian dollar notes and coins can be seen in a cash register at a store in Sydney© Reuters/David Gray Australian dollar notes and coins can be seen in a cash register at a store in Sydney

The New Zealand dollar was perched near four-month peaks on Friday having outflown all competitors this week as a run of upbeat economic data and a favourable ruling on bank capital gave it a major lift on its Australian peer.

The Kiwi dollar was last at $ 0.6543, having touched a top of $0.6562 on Thursday.

That left it 1.8% higher for the week so far, the best performance since early September.

The Aussie dollar was flat at $0.6835 and up almost 1.1% for the week, although that was largely due to U.S. dollar weakness rather than its own strength.

Australian pundits writing off Blackcaps chances

  Australian pundits writing off Blackcaps chances The two sides will meet in Australia in less than two weeks.They think New Zealand will struggle with the Aussie pace attack on their flat wickets.

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Indeed, Australian data this week has been mostly dismal with third-quarter growth disappointing and the current quarter looking no better.

New Zealand's figures have been a complete contrast with everything from retail sales to business sentiment to the terms of trade beating forecasts.

The government also plans to announce a significant increase in infrastructure spending later this month, using low borrowing costs to stimulate growth.

All of this led investors to scale back the chance of more rate cuts from the Reserve Bank of New Zealand while narrowing the odds on easing by the Reserve Bank of Australia (RBA).

Market pricing now implies only a 16% chance of an RBNZ cut in February, compared to 58% for the RBA <0#YIB:>.

Analysts nudge up forecasts for Aussie dollar, Kiwi already ahead - Reuters poll

  Analysts nudge up forecasts for Aussie dollar, Kiwi already ahead - Reuters poll Analysts nudge up forecasts for Aussie dollar, Kiwi already ahead - Reuters pollAnalysts polled by Reuters see the Aussie at $0.6800 in one and three months, up a cent from last month's poll and in line with its current $0.6830 reading.

Bernard Hickey delivers the key news overnight in 90 seconds at 9am in association with ASB, including news the New Zealand dollar held above 66 USc

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The divergence of fortunes has seen the Aussie skid to a one-month trough on the kiwi at NZ$ 1.0416, having shed four cents in as many weeks.

"Australia's domestic economy is weak, while New Zealand's economy appears to have reached an encouraging turning point, and is improving," said Richard Grace, chief currency strategist at CBA.

"AUD/NZD has depreciated below the current 200-day moving average of NZ$1.0574 and is set to further depreciate to NZ$1.0350."

He noted Australian one‑year overnight indexed swap (OIS) rates, which essentially map where the market thinks the cash rate is heading, had declined to 39 basis points below those in New Zealand.

"The risk is it falls further to ‑50 basis points, lowering AUD/NZD below NZ$1.0200."

Kiwi 10-year bond yields were also up a steep 18 basis points on the week, against 10 basis points for Aussie paper.

The Aussie bond currently yields 37 basis points less than the Kiwi, compared to 11 basis points early this month. Australian three-year bond futures were off 1.5 ticks on Friday at 99.300, a drop of 5 ticks for the week.

(Editing by Sam Holmes)

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The Geminidsmeteor shower, a trail of asteroid dust that Earth passes through each December, peaks on Friday. NASA's record-breaking Parker Solar Probe spotted the dust trail from space for the first time ever. As it circles the sun 21 more times, the probe will help scientists study the unknown structure of the Geminids trail. Visit Business Insider's homepage for more stories. The Geminids meteor shower peaks on Friday night, and for the first time ever, a spacecraft has spotted the asteroid dust that makes those shooting stars.

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