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NZ dollar outshines Aussie

NZN 1/06/2017 Rebecca Howard

The New Zealand dollar touched a fresh four-month high against its Australian counterpart on Thursday after the Aussie was weighed by China's Caixin manufacturing performance index.

The kiwi traded at A95.60c at 5pm in Wellington versus 95.09c late Wednesday. It touched 95.70, the highest since early February, during the day.

The kiwi was largely unchanged against the greenback, trading at US70.75c from 70.85c.

The Aussie lost ground when the Caixin manufacturing PMI fell for a third straight month, from 50.3 to 49.6. The number was in contrast to the official manufacturing PMI, which stabilised at 51.2 in May.

"That was an 11-month low and we saw the Aussie get pummelled," said Mark Johnson, senior dealer at OMF.

The kiwi has lifted against the Aussie in recent sessions as the local economic outlook is better than the outlook in Australia.

Mr Johnson said it still has some upside, while showing strong resistance at A96.60c.

"It's very hard to pick a top. It seems to be on an upward sloping trend challenge. It has rallied for nine out of the last 10 days with a pretty rapid ascent and there's not been a pullback," he said.

The kiwi was also supported when New Zealand's terms of trade rose to the highest level in about 44 years.

"There is a strong positive income pulse brewing in the NZ economy, courtesy of rising export prices and relatively subdued import prices," said BNZ in a note.

"A higher terms of trade is a lift in purchasing power of the nation's exports; an income boost."

The kiwi fell to 62.91 euro cents from 63.41 cents and declined to 54.97 British pence from 55.28 pence. It fell to 4.8028 yuan from 4.8423 yuan and dropped to 78.50 yen from 78.62 yen.

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