The New Zealand dollar held near 72USc today after China reported its economy expanded 10.3% in the second quarter over a year earlier.This is down from the first quarter's explosive 11.9% expansion, but dealers said the growth and other Chinese data were
The New Zealand dollar held near 72USc today after China reported its economy expanded 10.3% in the second quarter over a year earlier.
This is down from the first quarter's explosive 11.9% expansion, but dealers said the growth and other Chinese data were better than expected.
The NZ dollar was 72.00USc at 5pm, down from 72.30USc at 8am. It had surged to a two-month high 72.55USc on Wednesday night from 71.64USc at 5pm yesterday.
"It went up to 72.40USc but came off between the end of New York and before the Chinese numbers. We went back up to 72.40USc on the Chinese numbers but drifted back again," one dealer said.
There is resistance around the 72.40USc level the NZ dollar has bounced off a couple of times. Support is around 71.80USc.
The performance of equity markets overnight will be a factor in determining future direction and attention is also turning to New Zealand's Consumer Price Index (CPI) data tomorrow.
"We anticipate Friday's CPI data will show that June was the last of three subdued quarters for inflation. Prices barely budged in the six months from October 2009 to March 2010, as weak demand kept a firm lid on the price of domestically produced goods and services, and the strong exchange rate forestalled increases in imported or import-competing products," Westpac said in a preview.
The market is expecting a 0.4% rise in the June quarter CPI to an annual rate of 1.9%, while the Reserve Bank is expecting 0.5% for the quarter.
A "veritable maelstrom" will push annual inflation to 5.1% by June 2011 but the central bank is expected to look through the wide range of rising government charges and focus on inflationary expectations.
The NZ dollar rose against the Australian dollar to 81.78Ac at 5pm from 81.30Ac at the same time yesterday.
The NZ dollar also reached a fortnight high €0.568 early today and was €0.5650 by 5pm from €0.5636 at the same time yesterday.
The NZ dollar pushed to a three-week high near ¥64.30 early today, and by 5pm was ¥63.38, from ¥63.73 yesterday.
The trade weighted index was 68.08 at 5pm from 67.86 yesterday.
