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NZD continues to hover around 68 US cents, Australian 4Q GDP in focus

Wednesday 6th March 2019

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The New Zealand dollar continues to hover around 68 US cents, capped by strong US data overnight that gave the greenback some support. 

The kiwi was trading at 68.01 US cent at 8am in Wellington from 67.98 US cents at 5pm in Wellington. The trade-weighted index was unchanged at 73.76.

"US data beat expectations, lending the USD some support. That said, recent central bank caution has contained volatility for the time being and that is reflected in the tight ranges for major currency pairs," said ANZ Bank FX/rates strategist Sandeep Parekh. 

The US ISM non-manufacturing index rose to 59.7 points compared with expectations of 57.4. New orders rose strongly to 65.2 points from 57.7 – hitting a 13-year high. Export orders also rose sharply, while the backlog of orders firmed. US December new homes sales rose 3.7 percent on the month but the November print was revised down to 9.1 percent from 16.9 percent.

The kiwi was also supported when the global dairy prices moved higher in the overnight auction, with whole milk powder prices, the key price for Fonterra suppliers, lifting 6.0 percent.

The main focus on the day will be the fourth-quarter gross domestic production data in Australia.  " Poor data have led to revisions to GDP estimates, which has kept pressure on the AUD of late," said Parekh.

The Australian economy likely expanded 0.5 percent on quarter and 2.7 percent on the year, according to the median in a Bloomberg poll. ANZ, however, is expecting a 0.2 percent on quarter expansion. 

The kiwi traded at 95.91 Australian cents from 96.07.  It was at 51.62 British pence from  51.68 British pence  and at 60.14 euro cents from 60.02.

It was at 76.07 yen from 76.06 yen and at 4.5608 Chinese yuan from 4.5566 Chinese yuan.

(BusinessDesk)

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