Aussie Falls Most in a Month Versus Kiwi as Data Points to Slowing Growth

Australia’s dollar slid against all of its major peers after data showed retail sales unexpectedly declined and imports slumped to the least since February.

The so-called Aussie slid the most in four weeks against New Zealand’s kiwi dollar as today’s economic reports damped demand for assets in the larger South Pacific nation. Traders are betting the Reserve Bank of Australia will raise its target rate by 19 basis points over the next 12 months, down from 43 basis points two weeks ago, according to a Credit Suisse Group AG index based on swaps prices.

There was “very weak consumer spending over the past few months in Australia, so that’s certainly weighing on the Aussie,” said Jonathan Cavenagh, a currency strategist at Westpac Banking Corp. in Singapore. The kiwi “may do a little bit better today on the back of some Aussie-kiwi selling.”

Australia’s dollar fell 0.4 percent to 96.41 U.S. cents as of 4:32 p.m. in Sydney from the close in New York. It reached 95.37 cents yesterday, the lowest since Sept. 24, before rallying 1 percent, the sharpest gain since Nov. 18.

New Zealand’s dollar climbed 0.7 percent against the Aussie, set for the largest daily gain since Nov. 4. The kiwi advanced 0.3 percent to 75.10 U.S. cents.

Retail sales in Australia fell 1.1 percent in October, the Bureau of Statistics said today. That compared with the 0.4 percent increase estimated by economists in a Bloomberg News survey. Total exports rose 1 percent in October while imports fell 3 percent.

Data yesterday showed Australia’s economy expanded 0.2 percent in the third quarter from the earlier period, the worst performance since a contraction at the end of 2008.

Summer Drought

The MSCI Asia Pacific Index of shares climbed 1.4 percent today after the Standard & Poor’s 500 Index surged the most in three months. The Reuters/Jeffries CRB Index of 19 raw materials jumped 2.5 percent yesterday.

Gains in New Zealand’s currency were limited after Agriculture Minister David Carter said the nation’s largest dairy-farming region may face a summer drought for a second year, potentially affecting economic growth. The risk of a significant drought in the North Island provinces of Waikato and Northland was “very high” owing to abnormally dry conditions, he said today in an interview from Christchurch.

To contact the reporters on this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.

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