The New Zealand dollar fell against its Australian counterpart after strong consumer spending across the Tasman trimmed expectations the Reserve Bank of Australia will cut rates again.

The kiwi declined to 87.05 Australian cents at 5pm in Wellington from 87.55 cents at the close of trading in New York on Friday, and from 87.12 cents at the Wellington close last week.

The New Zealand currency was little changed at 82.54 US cents at 5pm in Wellington from 82.56 cents at 8am and 82.63 cents at the New York close.

Australian retail sales grew 0.8 per cent in September, the fastest pace in seven months, according to Bureau of Statistics.

That has added to speculation Australia's central bank won't have to cut rates any further.

The RBA will review the target cash rate on Tuesday and is expected to keep it on hold at a record-low 2.5 per cent.

"The retail sales were very good numbers and certainly adds to the view that maybe the RBA won't cut rates again," said Michael Johnston, senior trader at HiFX in Auckland.

"We'd previously thought the kiwi would get into the low 90s, when we expected the RBA to cut rates again, but now it's ranging between 86.50 and 88 cents."

The kiwi dollar increased to 61.24 euro cents from 60.94 cents last week and to 81.49 yen from 80.87 yen last week.

The trade-weighted index increased to 76.81 from 76.63 in Wellington Friday.


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