By Paul McBeth
Nov. 5 (BusinessDesk) - The New Zealand dollar followed its Australian counterpart higher in local trading after retail figures across the Tasman beat expectations, fuelling demand for the commodity-linked currencies ahead of tomorrow's Reserve Bank of Australia rate review.
The kiwi rose to 82.50 US cents from 82.38 cents at 8am and 82.44 cents on Friday in New York. The trade-weighted index was little changed at 73.98 from 73.89 last week.
Sales rose 0.5 percent to A$21.6 billion in September from a month earlier, according to the Bureau of Statistics, beating the 0.4 percent increase forecast in a Bloomberg survey of economists. That comes ahead of the RBA's target cash rate review tomorrow, where economists expect the central bank will cut the benchmark rate a quarter-point to 3 percent.
The Australian dollar rose to US$1.0354 from US$1.0331 last week and the kiwi slipped to 79.64 Australian cents from 79.73 cents last week.
"The kiwi could look through 80 Australian cents if the RBA cuts tomorrow," said Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney. "If they hold, the Aussie dollar could get a bit of support."
This week is full of event risk for the local currency with a neck-and-neck race in the US Presidential election expected to keep investors on tenterhooks.
One of the latest polls showed incumbent President Barack Obama is slightly ahead of challenger Mitt Romney in Ohio and Florida, viewed by many strategists as the two most important swing states. The NBC News/Wall Street Journal/Marist College survey of likely voters put Obama ahead of Romney in Ohio, 51 percent to 45 percent, and in Florida, 49 percent to 47 percent, according to Bloomberg News.
New Zealand labour figures later this week will also be watched by traders, with Thursday's household labour force survey expected to show a falling rate of unemployment.
"The labour market data is pretty volatile - anything could happen if the last five years are anything to go by," Tennent-Brown said.
The kiwi will fall this week, according to four of six strategists in a BusinessDesk survey. The range was seen to be between 81 US cents and 83 cents with a downside bias.
New Zealand's currency traded at 64.34 euro cents at 5pm in Wellington from 64.23 cents last week. It rose to 66.43 yen from 66.29 yen and virtually unchanged at 51.48 British pence.