The Australian dollar dipped on Wednesday against the currency of New Zealand as economic data indicates the two South Pacific nations are moving in opposite directions, according to Bloomberg.
The Kiwi surged against each of its 16 major rivals after strong data about core retail sales in New Zealand during the April-to-June period of this year. The Aussie dropped for a third-straight trade session against the world's reserve currency in the aftermath of wage growth data indicating its slowest advance in more than three years.
"While cutting rates is associated with a slowing economy, the consumer reaction is generally different," states a research note authored by economist Gareth Aird with Commonwealth Bank of Australia, according to Bloomberg. "A lower cash rate means lower mortgage rates. And this means lower monthly mortgage repayments, the ability to repay debt quicker or cheaper new debt. All of these three factors are positive for consumer sentiment."
The Aussie lost 0.4 percent of its value against the New Zealand dollar, slumping to its lowest rate in nearly five years against the its counterpart.
Also tugging down the Aussie against the U.S. dollar on Wednesday was strong retail sales data released by the U.S. from last month, MarketWatch reports.
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