NZ dollar little changed before GDP data that may show stronger growth
By Jonathan Underhill
March 15 (BusinessDesk) - The New Zealand dollar was little changed, holding above 73 US cents ahead of figures that may show the economy accelerated in the fourth quarter, a contrast to the most recent US data which showed weaker retail sales.
The kiwi dollar traded at 73.27 US cents as at 8am in Wellington from 73.39 cents late yesterday. The trade-weighted index slipped to 74.96 from 75.07 yesterday.
New Zealand gross domestic product probably grew 0.8 percent in the fourth quarter, up from 0.6 percent three months earlier, while year-on-year growth sped to 3.1 percent from 2.7 percent based on the consensus of economists. The figures may keep intact expectations that the Reserve Bank is on a gradual path to increasing interest rates. Meanwhile, the control group of US retail sales edged up just 0.1 percent in February, a quarter of the expected pace, adding to expectations the Federal Reserve won't signal any acceleration of rate hikes at its meeting next week.
"While GDP growth is down from its lofty 2016 highs, growth around trend at this point in the cycle, and at a time of headwinds from a softer housing market, capacity pressures and political uncertainty is nothing to be scoffed at," said Philip Borkin, senior macro strategist at ANZ Bank New Zealand, in a note. "It is a pace of growth we see more-or-less persisting."
The kiwi fell to 92.97 Australian cents from 93.19 cents yesterday. "With global commodities treading water, and both the RBNZ and RBA sitting on their hands, relative economic data will determine moves in this cross," Borkin said, adding that he didn't expect much reaction in the cross rate from today's data.
The kiwi declined to 77.75 yen from 78.11 yen yesterday. It traded at 59.22 euro cents from 59.16 cents and traded at 52.46 British pence from 52.48 pence. The kiwi traded at 4.6263 yuan from 4.6342 yuan.