NZ dollar steady before GDP, slips vs. euro as Cyprus fears ebb

Thursday 21st March 2013

The New Zealand dollar was little changed against the greenback ahead of figures forecast to show the economy picked up pace in the fourth quarter. It dropped against the euro on speculation may provide aid as an alternative to an EU bailout.

The New Zealand dollar traded at 82.31 US cents from 82.27 cents at 5pm in Wellington yesterday. The trade-weighted index was at 75.72 from 75.78.

The economy grew 0.9 percent in the fourth quarter, accelerating from a 0.2 percent pace three months earlier, according to a Reuters survey. The numbers are seen as historic and the outlook is now clouded by drought though a rogue number still has the potential to move the currency, traders said.

The GDP data "has been quite a volatile number previously," said Tim Kelleher, head of institutional FX sales at ASB Institutional. "The 200-day moving average of 81.95 (US cents) should hold unless GDP is a shocker."

The kiwi fell to 63.54 euro cents from 63.90 cents late yesterday after the European Central Bank agreed to provide liquidity to the island nation's banks and amid speculation Russian investors could step in as an alternative to the stalled EU proposal. A Cyprus government spokesman denied the nation had reached a deal to sell Cyprus Popular Bank to Russian investors, according to Bloomberg.

The kiwi didn't move much after the Federal Reserve maintained its US$85 billion a month of bond purchases and slightly trimmed its range for US economic growth, giving no signal of an end to quantitative easing.

The New Zealand dollar traded at 79.23 Australian cents from 79.28 cents and fell to 54.41 British pence from 54.52 pence. It rose to 79.03 yen from 78.19 yen, continuing its volatile track against Japan's currency.

BusinessDesk.co.nz

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