NEW YORK (Forex News Now) – The Aussie and the Kiwi both rose in currency market trading today after two reports – Australia’s New Vehicle Sales and New Zealand’s Retail Sales – were released.
The Australian Bureau of Statistics announced that the total number of new vehicles sold in Australia fell by 0.6% in October from the previous month, although sales remained up on a year-on-year basis by 3.3%.
Five out of the eight states in Australia saw falling new vehicle sales figures in October, which is generally an indicator of decreasing domestic demand for imports and a potential harbinger for tough economic times ahead.
The fact that new vehicle sales are still up for the year – and Australia is one of the developed world’s better-performing economies in 2010 – should give the Aussie continued momentum throughout 2010, though.
In global forex trading so far today, the Aussie has gained 0.72% on the euro, now at 1.3759, and moved up slightly on the dollar, gaining 0.06% to 0.9892. The Aussie has also performed strongly against the yen – up 0.56% to 81.96 – and the Kiwi – up 0.23% to 1.2726.
Today’s gains are the first positive news for the currency in three trading days, suggesting that traders believe that the Aussie has been largely oversold over the past two weeks. Analysts also suggest that bargain hunters are looking to make a profit on the expectation that the Aussie will climb back above parity with the dollar in the near term.
Meanwhile, the Kiwi saw positive forex trading news of its own, rising 0.43% to 0.7771 on the dollar after a strong retail sales report for the third quarter.
Statistics New Zealand announced that sales gained 0.7% for the third quarter from the second quarter, which saw a 1.5% increase in sales. The increase was unexpected; the consensus estimate was for no meaningful change in the report.
Consumer spending and increased domestic demand drove the Kiwi, further suggesting that the Reserve Bank of New Zealand will increase the official cash rate next year. A income-tax cut that took place on October 1st is also thought to have helped, although consumer confidence still remains at a 14-month low.
New Zealand’s unemployment rate also dropped, falling to 6.4% from 6.9% in the previous quarter.
The positive news may not be indicative of real strength, though, according to Ian Morrice, the CEO of New Zealand’s largest discount retailer, Warehouse Group Ltd. In a statement released today, Morrice said, “We are not yet seeing signs of any real or sustainable recovery in consumer spending”. If accurate, this sentiment could weigh against the recovering New Zealand economy through the end of the year.