Dollar little changed after current account data

Wednesday 22nd December 2010

The New Zealand dollar was little changed today after current account data was released ahead of gross domestic product (GDP) data for the September quarter tomorrow.

By 5pm the New Zealand dollar was at US74.20c, unchanged from US74.20c at 8am and down from US74.57c at 5pm yesterday. It had risen on Tuesday night to US74.84c but drifted back after failing to break key levels.

The NZ dollar was at A75.41c at 5pm from A74.56c 8am and A74.83c at 5pm yesterday.

TD Securities said today that it expected that GDP contracted by 0.3% in the third quarter. It said that current account data today did not change its view of the growth number.

The current account was in surplus for the September quarter because of re-insurance flows from offshore because of the Canterbury earthquake.

"There was no market reaction to today's report and we expect no reaction from the ratings agencies," Deutsche Bank said.

"As far as the latter is concerned, especially Standard and Poor's, they will continue to look for evidence pointing to a sustained improvement in national savings performance as the economy returns to trend," Deutsche Bank said.

The euro has been weak after Moody's warned it may downgrade Portugal's rating. Still, the NZ dollar edged down to 0.5647 euro at 5pm from 0.5661 at the same time yesterday, and eased to 62.14 yen from 62.38.

The trade weighted index was down to 67.19 at 5pm from 67.39.

NZPA

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