A day after falling in reaction to the collapse of South Canterbury Finance, the New Zealand dollar rose on strong economic data in Australia and China.The NZ dollar was at 70.19USc at 5pm from 69.72USc at 8am and 70.30USc at 5pm yesterday.Both the Austra
A day after falling in reaction to the collapse of South Canterbury Finance, the New Zealand dollar rose on strong economic data in Australia and China.
The NZ dollar was at 70.19USc at 5pm from 69.72USc at 8am and 70.30USc at 5pm yesterday.
Both the Australian sharemarket and Australian dollar rose on news that the Australian economy expanded 1.25 in the second quarter, beating forecasts of a 0.9% rise.
The Australian Bureau of Statistics also revised higher first quarter GDP growth to 0.7% from 0.5%.
Economists said the data also challenged the view that Australia has a two-speed economy dominated by a mining boom, while the household sector lagged.
This positive note was further reinforced by news that China's manufacturing sector rebounded in August.
"Aussie GDP was a good strong number," said Imre Speizer, senior currency strategist at Westpac. "We followed the aussie dollar to some extent but the cross suffered obviously."
Against the Australian dollar, the NZ dollar was around four month lows. It was at 78.11Ac at 5pm from 78.55Ac yesterday.
The Australian dollar rose to be 89.82USc at 5pm from 89.42USc yesterday.
Futures prices were also indicating a higher US sharemarket and investors are waiting for tomorrow's Fonterra internet milkpowder auction.
The ANZ commodity price today showed weak commodity prices but the auction will provide a more up to date picture.
The NZ dollar was affected by South Canterbury Finance's decision yesterday to call in the receivers, resulting in the government paying out $1.6 billion to investors. It expects to claw much of that money back.
The NZ dollar was buying €0.5524 at 5pm today from €0.5550 yesterday, and ¥59.20 from ¥59.21.
The trade weighted index was 65.36 at 5pm from 65.80 yesterday.
