NZ dollar holds near 6-month high ahead of GDP
The New Zealand dollar held near a six-month high amid speculation second-quarter gross domestic product will show the local economy has expanded in the face of weaker global growth.
The New Zealand dollar was little changed on 82.76 US cents just before 8am from 82.82 cents yesterday at 5pm. The trade weighted index declined to 73.28 from 73.53.
The New Zealand economy's pace probably slowed in the June quarter from March, though forecasts range from a small contraction to a modest 0.7 percent rise as economists ponder the impact of a strong kiwi dollar on manufacturing and the timing of Christchurch's rebuild. A Reuters' survey of 13 economists predicts GDP grew 0.3 percent in the second quarter, slowing from March's 1.1 percent pace.
That's slower than the 0.4 percent forecast in the Reserve Bank's monetary policy statement, issued last week.
"It would take a surprise on the topside, say 0.9 on the quarter to lift the New Zealand dollar higher - we are forecasting 0.1 percent - therefore topside efforts should be limited" said Alex Sinton, senior dealer at ANZ New Zealand.
GDP comes after data on Wednesday showed the nation's current account deficit widened in the second quarter, as the nation's Australian-owned banks reaped bigger profits and imports rose with fuel cost. The deficit was $10.1 billion, or 4.9 percent of GDP, in the year ended June. 30, from a revised $9 billion three months earlier, according to Statistics New Zealand.
The New Zealand dollar fell to 64.86 yen from a five-month high of 65.65 yen yesterday. The kiwi initially rallied against the yen after the Bank of Japan ramped up its money-printing programme in the face of slowing economic growth and continuing deflation. That comes after the US Federal Reserve last week embarked on an unlimited programme to buy mortgage-backed securities in its third round of quantitative easing.
The New Zealand dollar fell to 78.85 Australian cents from 79.22 cents. The kiwi was little changed on 63.37 euro cents from 63.41 cents. It was unchanged on 51 British pence.
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