By Candice Zachariahs April 5 (Bloomberg) -- Australia’s dollar fell for a second day after the central bank left interest rates unchanged for a fourth meeting and a government report showed the nation posted an unexpected trade deficit. The Aussie weakened from almost a record high against the greenback after Reserve Bank of Australia Governor Glenn Stevens said the currency’s recent strength was helping to control prices, damping the need for further rate increases. New Zealand’s dollar climbed to a four-month high versus the yen after Finance Minister Bill English said business confidence was likely to “bounce back” and the nation probably doesn’t need any more interest rate cuts. “The RBA statement is consistent with inaction for some period of time and there’s nothing new in the statement that would push the Aussie higher,” said Sue Trinh, a senior currency strategist at Royal Bank of Canada in Hong Kong. “The Aussie is now going to be disproportionately impacted by downside data surprises, given the market is extremely long.” A long position is a bet an asset will rise. Australia’s dollar fell 0.2 percent to $1.0338 as of 11:50 a.m. in New York from $1.0363 yesterday. It touched $1.0417 yesterday, the strongest since it began trading freely in 1983. The Aussie appreciated 0.5 percent to 87.53 yen from 87.11 yen. New Zealand’s dollar gained 0.2 percent to 76.97 U.S. cents from 76.82. It advanced 0.9 percent to 65.17 yen, after touching 65.28 earlier today, the highest since Nov. 22. Trade Deficit Australia had a trade deficit of A$205 million ($212 million) in February, the first time imports exceeded exports since March 2010, the statistics bureau said today. Economists surveyed by Bloomberg forecast a surplus of A$1.2 billion. The kiwi fell earlier after a report showed business confidence slumped to a two-year low in the first quarter following the nation’s deadliest earthquake in 80 years. A net 27 percent of 690 companies surveyed said they expected the economy to deteriorate during the next six months, from a net 8 percent expecting an improvement in the previous survey, the New Zealand Institute of Economic Research said. Benchmark interest rates are 2.5 percent in New Zealand and 4.75 percent in Australia, compared with as low as zero in the U.S. and Japan, attracting investors to the South Pacific nations’ higher-yielding assets. The risk in such trades is that currency market moves will erase profits. --With assistance from Alexandra Harris in New York. Editors: Paul Cox, Dennis Fitzgerald To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

Source