NZ dollar higher against Aussie after disappointing Australian GDP

Thursday 7th March 2019

The New Zealand dollar was higher against the Australian dollar after disappointing fourth-quarter gross domestic product data across the Tasman.

The kiwi traded at 96.38 Australian cents at 8am in Wellington from 96.12 cents at 5pm in Wellington. It was at 67.71 US cents from 67.61 cents.

Australia’s economy grew 0.2 percent in the December quarter, lower even than downgraded expectations of 0.3 percent and taking the annual growth rate to 2.3 percent.

"AUD lost ground to the kiwi overnight. Fourth-quarter GDP came in weaker than expected which added to recent economic woes. Expect the AUD to remain under pressure," said Sandeep Parekh, FX/rates strategist for ANZ Bank.

The Aussie dollar was also weighed after "two more banks changed their calls and forecast rate cuts this year. The market’s estimate of the likelihood of a cut this year jumped to 73 percent from 58 percent yesterday – a big change," Marshall Gittler, chief strategist at ACLS Global.

Data from Australia will remain in focus today with the trade balance and retail sales due.

The Kiwi inched higher against the greenback as markets await further detail on US-China trade negotiations, said Parekh.

The New Zealand dollar was trading at 51.41 British pence from 51.45, at 59.87 euro cents from 59.85, at 75.65 yen from 75.53 and at 4.5426 Chinese yuan from 4.5410.

The trade-weighted index was at 73.58 points from 73.49.

(BusinessDesk)

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