4 Sep 2013

Dollar declines further against the Australian

7:33 pm on 4 September 2013

The New Zealand dollar has extended its decline against the Australian dollar after faster-than-expected second-quarter growth in Australia dulled its expectations of further interest rates cuts.

AAP reports the kiwi fell to 85.81 Australian cents at 5pm on Wednesday from 86.11 cents immediately before the gross domestic product figures were released, and down from 86.63 cents on Tuesday.

ASB Bank head of external foreign currency sales Tim Kelleher says that reflects expectations the Reserve Bank of Australia (RBA) won't cut its official cash rate further and after economic growth data on Wednesday.

The kiwi was barely changed against the currencies of other major trading partners, at 78.07 US cents, 50.15 British pence, 59.19 euro and 77.85 yen.

In the share market, the benchmark Top 50 index rose 4 points to 4610.

The market is in a holding pattern after the reporting season finished last week and as it awaits further signals from offshore, particularly US job figures later this week.

Tyndall Investment Management equities manager Rickey Ward says our largest listed company, Fletcher Building, was a major standout on Wednesday.

He says the New Zealand dollar has weakened against the Australian which has lead to Australian investors to invest their money outside Australia in like-minded companies, with New Zealand as a clear example.

Mr Ward says the company has indicated that the Australian market won't get any worse in the residential sector which has probably provided a level of confidence that things will get better.

Fletcher Building gained 17 cents to $9.42, while Sky TV fell 20 cents to $5.70.