Monday 25th November 2013
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The New Zealand dollar rose to a five-year high against its trans-Tasman counterpart as traders mulled the impact of revisions to the way gross domestic product is measured that may show faster growth in 2012 stemming from the Canterbury rebuild.
The kiwi rose as high as 89.77 Australian cents, trading at 89.76 cents at 5pm in Wellington from 89.28 cents on Friday in New York. It rose to 82.20 US cents at 5pm in Wellington from 81.83 cents at 8am and 81.93 cents last week.
Statistics New Zealand is reviewing the way it measures GDP, and those changes will show up in the Dec. 19 release of third-quarter growth. In a report published last week, the government department said the changes are likely to show a "significant increase" in 2012 GDP as a result of better measurements from the Canterbury rebuild and "moderate increases" from IT and telecommunications, and has local economists tweaking their forecasts to be more positive.
"We think it could be something around 0.5 of a percentage point over last year's GDP," said Imre Speizer, market strategist at Westpac Banking Corp in Auckland. The kiwi's gains were mainly against the Australian dollar, he said.
Westpac's Speizer said the greenback could eke out more gains this week on the back of second-tier data, as traders continue to monitor the health of the world's biggest economy for any insight as to when the Federal Reserve may start unwinding its stimulus programme. The next major data release will be in almost two weeks when November's non-farm payrolls are published.
A BusinessDesk survey of eight traders and strategists predict the local currency may trade between 80 US cents and 83.90 cents this week. Four expect the currency to decline, three expect it to remain unchanged while one says it may gain.
The kiwi gained to 60.68 euro cents from 60.42 cents on Friday in New York, and rose to 50.66 British pence from 50.48 pence. It climbed to 83.54 yen from 82.94 yen last week. The trade-weighted index advanced to 77.21 from 76.87.
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