The New Zealand dollar fell as local economic growth met market expectations, while a more upbeat Federal Reserve signalled steeper interest rate increases as the world's biggest economy shows more signs of life.
The kiwi fell to 85.24 US cents at 5pm in Wellington from 85.51 cents at 8am and 86.21 cents yesterday. The trade-weighted index declined to 79.88 from 80.22 yesterday.
New Zealand's economy grew 0.9 percent in the three months ended Dec. 31, led by an expanding manufacturing sector, according to Statistics New Zealand. That was largely in line with market expectations, leaving traders to mull over the impact of the Fed's more optimistic view of the US economy. The Fed raised its projections for interest rate hikes next year, spurring demand for the greenback.
"You'll get more exaggerated moves (from local data) from lower numbers than higher numbers in these key releases because of how much good news is fully price in the kiwi," said Alex Hill, head of dealing at HiFX in Auckland. "The US dollar had a good move, and in the short-term things are really down to them - everyone's back on the tapering theme with the focus back on US data."
HiFX's Hill said the kiwi has settled very quickly into a new range between 84.50 US cents and 86.50 cents.
Traders will be watching US data during the Northern Hemisphere session, including new jobless claims, home sales and the Philadelphia Fed business outlook survey.
The kiwi dollar increased to 94.54 Australian cents at 5pm in Wellington from 94.40 cents yesterday and was little changed at 87.23 yen from 87.21 yen yesterday. It slipped to 51.54 British pence from 51.87 pence and declined to 61.63 euro cents from 61.81 cents.
The New Zealand and Chinese governments this week agreed to allow direct trading between the nations' currencies, and the kiwi fell to 5.3064 yuan from 5.3324 yuan yesterday.
The yuan is pegged to movements in the US dollar. China this week doubled the yuan's trading band against the greenback to 2 percent on either side of a daily reference rate set by the central bank.
This article is tagged with the following keywords. Find out more about MyNBR Tags
Most listened to
- Abano CEO Richard Keys on the sped up timetable for selling the audiology stake
- Without cyber rules, business may struggle to fight back warns FireEye chief security strategist Richard Bejtlich
- In Editor’s Insight, Nevil Gibson says a New Zealander is helping to unlock the potential of Africa’s cities
- Pacific Edge's David Darling discusses the outlook, says company won't need more capital
- Craigs' Mark Lister says key US data out this week may bring NZ exporters some cheer