The New Zealand dollar slipped overnight as some traders were disappointed yesterday's gross domestic product report failed to beat expectations, however it remains elevated above 87 US cents
The kiwi edged lower to 87.07 US cents at 8am in Wellington from 87.13 cents at 5pm yesterday. The trade-weighted index weakened to 81.02 from 81.09 yesterday.
The kiwi softened following the GDP report yesterday, following a spike higher above 87 US cents. Government figures showed the economy grew at a 1 percent pace in the first three months of the year, from an upwardly revised 1 percent gain in the fourth quarter, marking three quarters of growth of at least 1 percent. While annual growth of 3.3 percent exceeded expectations of 3.1 percent, the quarterly growth was a touch below the Reserve Bank's 1.1 percent expectation, the 1.2 percent forecast in a Reuters poll of economists and the 1.4 percent pace expected by some in the market.
"Some of the wind was taken out of the New Zealand dollar's sails by an as-expected GDP outturn," Bank of New Zealand currency strategist Raiko Shareef said in a note. "The result was close enough to published forecasts, but in the days before, analysts had been talking about upside risk, warning that the outturn could be in the region of 1.3 percent to 1.4 percent. The market looked to be positioned for that result, and was disappointed."
The kiwi is likely to hold at 87 US cents on the downside and face resistance at its 2014 high of 87.80 cents, Shareef said.
In other news, Federal Reserve Chair Janet Yellen said that the New Zealand economy "seems to be doing extremely well". Yellen was commenting to reporters following a meeting with Prime Minister John Key at the Federal Reserve headquarters in Washington.
In New Zealand today, traders will be eyeing the ANZ-Roy Morgan Consumer Confidence report scheduled for release at 1pm.
The kiwi weakened to 51.10 British pence from 51.28 pence yesterday, dropped to 64 euro cents from 64.10 cents, was little changed at 92.65 Australian cents from 92.64 cents, and slid to 88.77 yen from 88.81 yen.