AUD/NZD drops below 1.1380 as N.Z. Manufacturing Climbs

New Zealand’s dollar remained higher against the Australian currency as data from the smaller nation showed a gauge of manufacturing climbed to a nine-year high and job advertisements increased.

New Zealand’s two-year swap rate gained to a two-year high on speculation the central bank will raise borrowing costs. The Aussie lost 0.8 percent this week versus the kiwi as traders see a 62 percent chance that the Reserve Bank of Australia will lower the key rate by March after reducing it to a record 2.5 percent last week. Australia’s dollar rose versus the greenback amid speculation investors are paring record bearish bets.

“Judging from what’s priced in markets, Australia may cut rates while New Zealand may either stay on hold or raise rates,” said Daisaku Ueno, a senior currency and fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo. “Aussie-kiwi probably has room to fall a bit further.”


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