NZ dollar gains ahead of figures expected to show GDP accelerated in second quarter

Thursday 15th September 2016

The New Zealand dollar rose ahead of figures expected to show the domestic economy accelerated in the second quarter, while the greenback fell from its highest levels in more than a week.

The kiwi rose to 72.78 US cents as at 8am in Wellington, from 72.60 cents late yesterday. The trade-weighted index gained to 77.74 from 77.59.

The local dollar recovered from the lowest in almost two weeks reached yesterday in the wake of a global slump in bonds, a jump in measures of investor risk aversion and weaker equity markets. Stocks on Wall Street were little changed overnight and the greenback drifted lower ahead of next week's Federal Reserve policy statement and speculation the Bank of Japan won't add to its stimulus measure at its policy meeting next week.

"The key events today will be NZ GDP, which should be supportive, and (Australian) employment, which could surprise either way," said Imre Speizer, market strategist at Westpac Banking Corp. "Combine this with the NZD’s slight negative momentum and we’re left with a neutral outlook today, in a 0.7230-0.7360 range" against the US dollar.

Economists expect the economy grew 1.1 percent in the second quarter, up from 0.7 percent three months earlier and exceeding the central bank's forecast of 0.8 percent growth. In Australia, government figures are expected to show the jobless rate held at 5.7 percent last month while the economy added 15,000 jobs, down from 26,200 in the previous month.

The local currency rose to 97.44 Australian cents from 97.09 cents and gained to 4.8569 yuan from 4.8444 yuan. It was little changed at 64.72 euro cents from 64.70 cents and traded at 54.98 British pence from 55 pence. The kiwi declined to 74.53 yen from 74.77 yen.

BusinessDesk.co.nz

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