NZ dollar sinks back to 70 US cents

Friday 31 March 2017 08:44 AM

NZ dollar sinks back to 70 US cents after US GDP, gains vs euro on weak inflation data

By Jonathan Underhill

March 31 (BusinessDesk) - The New Zealand dollar fell against the greenback after US fourth-quarter gross domestic product was revised up and gained versus the euro after weaker than expected inflation data from Spain and Germany.

The kiwi dollar declined to 70.02 US cents as at 8am in Wellington from 70.26 cents late yesterday. It rose to 65.48 euro cents, the highest in 10 days, from 65.33 cents.

The third estimate for US fourth-quarter GDP was a revision up to 2.1 percent annualised rate from 1.9 percent previously reported, reflecting a gain in consumer spending. The US dollar rose to a two-week high against a basket of currencies, helped by a weaker euro amid speculation the European Central Bank won't soon unwind its policy of providing extraordinary stimulus to the regional economic bloc. Adding to that speculation, Germany's annual inflation slowed to 1.5 percent on an EU harmonised basis in March from 2.2 percent in February, while in Spain the pace slowed to 2.1 percent from 3 percent.

"Some broadly-based USD strength sees the NZD just holding above the 0.70 mark, near the bottom of the 1 cent range it has traded within the past couple of weeks," said Jason Wong, currency strategist at bank of New Zealand, in a note.

Economists are expecting euro-zone inflation data due on Friday will show inflation in the region slowed to 1.8 percent in March from 2 percent.

The kiwi fell to 56.10 British pence from 56.44 pence, paring back some of the gains since UK Prime Minister Theresa May officially triggered Britain's exit from the European Union.

The kiwi dollar slipped to 91.41 Australian cents from 91.64 cents and rose to 78.32 yen from 78.14 yen. It fell to 4.8216 yuan from 4.8435 yuan. The trade-weighted index was little changed at 76.03 from 76.17 yesterday.

(BusinessDesk)

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