The New Zealand dollar breached another big figure very early today but was weak in afternoon trading after Chinese economic data failed to surprise.
The NZ dollar was US75.25c at 5pm, having risen to US76.35c, another 15-month high, around 7am today. It was US74.97c at 5pm yesterday.
The NZ dollar
tested highs when US stocks were rising but retreated when the US stocks were sold late in the US session.
In afternoon trading, eagerly awaited Chinese economic data was in line with expectations, but dealers said it failed to provide a positive surprise and the NZ dollar and other high yielding currencies drifted lower.
The US dollar bounced off a 14-month low against a basket of currencies after the Chinese data.
Although China's gross domestic product accelerated to 8.9 per cent in the third quarter, the result was in line with market expectations and gave traders an excuse to take profits in higher-yielding currencies.
BNZ was forecasting the NZ dollar would rise to US77c by December and peak at US80c in the third quarter of next year.
"Our view is we will see the currency trend higher, but I don't expect to see the same rapid appreciation we've seen over the past six months," BNZ currency strategist Danica Hampton said.
"The US dollar, while it may remain heavy, it won't dramatically decline at the same pace we've seen over recent months. At some point people will pause to reassess the strength and timing of the global recovery," she said.
Also, if the NZ dollar remained higher people would have to reassess growth forecasts for New Zealand.
The NZ dollar peaked around 7am at a year-high 69.47 yen, and at a 17-month high of 0.5075 euro.
It was 68.57 yen and 0.5020 euro at 5pm today from 67.98 and 0.5021 at the same time yesterday.
Against the Australian dollar, the NZ dollar reached its highest level in nearly a fortnight at A81.92c but retreated to A81.39c at 5pm.
The trade weighted index was 67.23 at 5pm from 67.09 yesterday.
- NZPA
