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New Zealand Dollar Unimpressed By Data

Fuseworks Media
Fuseworks Media

Wellington, March 27 NZPA - An improvement to the quarterly current account deficit failed to excite the New Zealand dollar today.

The kiwi trod a roughly 25-point range, despite the December quarter current account deficit beating forecasts by more than $400 million, to $3.09 billion.

That took the annual deficit to $13.8 billion, roughly as expected, or 7.9 percent of gross domestic product (GDP).

"It's been pretty quiet throughout the Asian session. We had data releases this morning but pretty much in line with market expectations," said ANZ Institutional Bank chief foreign exchange dealer Murray Hindley.

"Small rally, slight improvement, but this afternoon's been pretty quiet."

By 5pm, the kiwi was at US80.50c from US80.31c late yesterday afternoon.

It briefly topped US81c in overnight trading, in line with a general weakening of the US dollar which fell for a second straight session after data heightened worries about the health of the US economy and backed expectations of further interest rate cuts.

Against the Australian dollar, the kiwi continued to back away from a near-seven-week high touched yesterday. It weakened to A87.38c from A87.70c at the close yesterday, and the A88.17c high hit early the same day.

The kiwi was also softer against the yen and the euro, but up a touch against the pound, and the trade weighted index was at 71.21 from 71.63 at 5pm yesterday.

The domestic focus was on GDP data tomorrow, expected to show economic growth of 0.8 percent in the December quarter to be up 3.4 percent on a year earlier.

Today, the US dollar steadied against the euro after falling sharply for two days, but remained within striking distance of a record low after the European Central Bank president's remark that euro zone rates were at the right level cooled expectations for a near-term ECB rate cut.

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