Aussie Rises on Housing Starts, Kiwi Falls

It is another day of mixed results for the Aussie and the Kiwi. The Australian currency rose against major currencies on Wednesday, after strong housing starts data. On the other hand, the New Zealand currency lost ground in spite of strong retail sales data. The Aussie strengthened against the euro, the U.S. dollar and the British pound. At around 5:30 am GMT, the pound lost 0.25% of its value to trade at 1.5286, while the greenback lost 0.25% and stands around 0.9336. The Aussie made its biggest gains against the euro, however, as the European currency fell 0.31% to 1.3471. The Aussie found a tailwind in better than expected housing starts data. According to the

, housing starts in Australia rose unexpectedly by 3.1% in the March quarter, when most analysts predicted it to fall by 0.8%. In the last quarter of 2010, the Australian housing starts fell by 4%. The rise is even more unexpected if we take into account the devastating floods that have hit Queensland in January and December last year. Not all data published on Wednesday supported the rising Aussie as the Australian currency managed to shake off news of falling consumer sentiment. According to the

, the Australian consumer sentiment fell 2.6% in June to 101.2 from 103.9 in May. The consumer sentiment is now at its lowest point since June 2009, when the index stood at 100.1. The data show a mixed picture for the Australian economy. Australia was the only developed nation to avoid recession during the financial crisis. Its economy is fighting hard to shake off the negative effects of natural disasters, however. The Queensland floods have caused the growth of the economy to move into negative territory in the March quarter and the consumer sentiment data will put a question mark on just how strong the rebound in the June quarter will be. The Kiwi had a less fortunate day in Wednesday's early trading. The euro added 0.21% to its value against the New Zealand currency to stand around 1.7688, while the U.S. dollar rose 0.34% to 1.2262. The New Zealand currency failed to find support in better than expected retail sales. According to

, New Zealand's retail sales rose 0.9% in the March quarter, when most analysts had predicted a 0.5% rise. The first quarter retail sales were driven primarily by strong vehicle spending. Like Australia, New Zealand is trying to put natural disasters, i.e. the Christchurch earthquake, behind. So far, the results of the New Zealand economy seem to be stronger than those of its Western neighbor, but these results have failed to materialize in the values of the Aussie and the Kiwi. Traders who believe that both economies will make a full recovery from the natural disasters quickly, providing a significant tailwind to its currencies, will be interested in the CurrencyShares Australian Dollar Trust ETF

and the WisdomTree Dreyfus New Zealand Dollar Fund

. Other traders might think that there are still some bumps on the road to full recovery for both Australia and New Zealand. Some traders might also worry about the impact of rising inflation in China on the Australian and New Zealand exporters. Australia and New Zealand are big commodity exporters and China is currently the worlds biggest commodity consumer. Signs of weakening in the booming Chinese economy will be seen as bad news for the economies of Australia and New Zealand as well. These traders will be more interested in the ETFS Short New Zealand Dollar Long US Dollar ETC ETF (

) and the ETFS Short Australian Dollar Long US Dollar ETC (Sterling) ETF (SAUP).