25 Nov 2013

Kiwi hits five-year high against Australian dollar

7:27 pm on 25 November 2013

The New Zealand dollar hit a more than five year high against the Australian dollar on Monday as investors compared the relative interest rates in the two nations.

A director at Rankin Treasury Advisory, Derek Rankin, says money is flowing out of Australia and into New Zealand.

"Expectations are that at some point the New Zealand Reserve Bank will need to lift interest rates in New Zealand, sometime early in 2014" he says.

"In Australia, they've been cutting interest rates.

"Certainly the Reserve Bank of Australia is looking to lower interest rates, if they can, and the RBNZ is

looking at a situation where they may be forced to raise interest rates".

At the end of the business day, the Kiwi was trading at 89.75 Australian cents, just below its high for the day at 89.79 cents and up about two-fifths of a cent from the same time on Friday.

The New Zealand dollar was up about a quarter of a cent at 82.20 US cents, about three-quarters of a yen at 83.61 yen and it was slightly higher at 50.65 British pence and 0.6069 euro.

The share market was little changed, with the benchmark Top 50 Index easing 4 points to 4814.

Forsyth Barr investment adviser Damian Kearns says one of the day's highlights was Infratil confirming it had sold the Glasgow Prestwick airport in Scotland for one pound.

Infratil fell half a cent to $2.42.5f, Chatham Rock Phosphate gained 4 cents to 32 cents and The Warehouse rose 6 cents to $3.74.