NZ dollar rises back to 75 US cents after US GDP underwhelms
By Jonathan Underhill
July 31 (BusinessDesk) - The New Zealand dollar rose against a broadly weaker greenback, which fell after gross domestic product grew less than expected in the second quarter and first-quarter growth was revised lower.
The kiwi traded at 74.99 US cents as at 8am in Wellington, having reached 75.23 cents in New York on Friday from 74.75 cents in Asia at the end of last week. The trade-weighted index was at 78.97 from 79.04 in New York.
US GDP rose an annualised 2.6 percent in the second quarter versus expectations of a 2.7 percent gain, while growth in the first quarter was revised down to 1.2 percent from 1.4 percent. The data was enough to extend the greenback's slide, which has been stoked by the Senate's failure to overturn Obamacare. The US dollar fell against the euro after German inflation came in stronger than expected.
"A USD downtrend remained intact last week with US data and politics on Friday doing little to arrest the bias for a softer USD near term," said Doug Steel, an economist at Bank of New Zealand, in a note.
In events closer to home, traders will be watching for any further developments on North Korea after the US flew bombers across the peninsula after the North tested another intercontinental ballistic missile. The ANZ Business Outlook for July is due out today, the Reserve Bank of Australia releases its latest interest rate review tomorrow and on Wednesday the release of New Zealand second-quarter labour market data is due for release.
The kiwi traded at 93.89 Australian cents from 94.05 cents in New York on Friday and traded at 63.80 euro cents from 63.97 cents. It fell to 82.94 yen from 83.09 yen, traded at 57.09 British pence from 57.21 pence and fell to 5.0501 yuan from 5.0596 yuan.