Dollar gains after US GDP, trade data

The dollar rose against the greenback after the second reading of US fourth-quarter gross domestic product wasn't revised up as expected while the initial measure of US trade showed a bigger than expected deficit.

The local currency increased to 72.17USc at 8am in Wellington from 71.82USc late yesterday. The trade-weighted index rose to 78.47 from 78.11.

The US economy expanded at an annualised 1.9% pace quarter-on-quarter in the fourth quarter, missing expectations for growth of 2.1%, while the advance goods trade balance was a deficit of $US69 billion when a gap of $US66 billion was expected.

It was a night of mixed data in the US, with consumer confidence beating estimates in February. Traders said foreign exchange markets may not make meaningful moves before US President Donald Trump's speech to the Joint Session of Congress, which is expected to detail his policy plans.

"Markets remained in wait and see mode ahead of President Trump's inaugural speech to Congress, although a mixed bag of US economic data did dent the USD, US interest rates and US equities slightly," Westpac Banking Corp senior markets strategist Imre Speizer says.

The kiwi dollar rose to 94.02Ac from 93.47Ac late yesterday ahead of Australian fourth-quarter GDP today, which is expected to show the economy bounced back from a third-quarter contraction with growth of 0.7%, for an annual expansion of 1.9%.

Locally, traders will watch for fourth-quarter terms of trade this morning, while Quotable Value data showed New Zealand property values continued to rise at an unchanged annual pace in February as buyers sought out new areas of growth with some of the usual suspects cooling off in the month.

The average value of a New Zealand home rose 13.5% to $631,349 in February from a year earlier, with values up 1.1% on a rolling three-month basis, state-owned valuer Quotable Value said.

The kiwi rose to 58.11 British pence from 57.78 pence and gained to 68.03 euro c from 67.84 euro c. It was little changed at 80.87 yen from 80.90 yen and rose to 4.9535 yuan from 4.9341 yuan.

(BusinessDesk)