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Kiwi consolidates recent gains

Friday 15th April 2011

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The New Zealand dollar consolidated near five-month highs on a day in which investors were soothed by strong growth data in China.

The NZ dollar was at US79.44c at 5pm, little changed from US79.53c at 8am and down from US79.50c at 5pm yesterday.

A sustained NZ dollar rally this week had paused ahead of economic data released in China today.

China's economy grew 9.7% in the first quarter of 2011 from a year earlier, which was in line with expectations. Consumer inflation rose to a 32-month-high of 5.4% in March.

The Chinese economy is seen as strong and Chinese authorities are expected to tighten monetary policy again.

HiFX New Zealand said the NZ dollar remained in an uptrend toward US80c as broad US dollar weakness prevailed. The euro has also been strong against the US dollar and the Australian dollar has been mixed.

"Mixed signals from Federal Reserve speakers this week have left the market awaiting the next Federal Open Market Committee (FOMC) announcement on April 27," Daniel Bell, senior dealer at HiFX said.

"This meeting will be followed by a post FOMC media briefing where chairman Ben Bernanke will provide a rare question and answer session with reporters. The US Central Bank has decided to provide a briefing on a quarterly basis to provide more transparency on monetary policy communication."

ANZ said an 11.8% rise by the NZ dollar from lows during the past month has been "truly phenomenal".

The NZ dollar was at 0.5488 euro at 5pm from 0.5479 at the same time yesterday. It was little changed at A75.43c from A75.45c and was at 66.28 yen from 66.30 yen.

The trade weighted index was at 68.90 from 68.88 yesterday.

 

NZPA



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