Monday 30th April 2018
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The New Zealand dollar gained against the British pound, touching a week-high in New York, after figures showed the UK economy barely grew in the first quarter, denting expectations the Bank of England will hike interest rates next month.
The kiwi dollar traded at 51.39 British pence as at 8am in Wellington, having touched a week-high 51.48 pence in New York on Friday, from 50.71 pence in Asia at the end of last week. The kiwi traded at 70.79 US cents from 70.83 cents in New York.
The pound fell to its lowest level in almost nine weeks against the greenback after figures showed the economy grew just 0.1 percent in the first quarter, missing estimates for a 0.3 percent gain and slowing from a 0.4 percent pace in the final three months of 2017. The Bank of England had also projected a 0.3 percent gain in first-quarter growth and the market cut the odds of a hike by the BoE next month to just 20 percent from 60 percent. By contrast, US gross domestic product was an annualised 2.3 percent in the first quarter, beating estimates.
"Sterling was the day’s biggest casualty, falling 1 percent on the GDP miss," said Sharon Zollner, chief economist at ANZ Bank New Zealand, in a note. "BoE rate pricing was revised down sharply and for the year the market is now just looking for one rate hike in 2018."
The kiwi traded at 58.37 euro cents from 58.44 cents in New York and 58.32 cents in Asia at the end of last week in the face of mixed euro-zone data including French GDP that slowed to 0.3 percent in the first quarter.
In New Zealand today, traders will be watching for the ANZ Business Outlook for April and in Asia, China's non-manufacturing PMI for April is likely to be the focus.
The trade-weighted index was little changed from Friday at 73.52.
The kiwi traded at 77.20 yen from 77.22 yen on Friday in New York and traded at 4.4828 yuan from 4.4859 yuan. It was at 93.40 Australian cents from 93.49 cents.
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