The New Zealand dollar posted modest gains at the end of a week in which it fell to decade-low against the Australian dollar.
By 5pm the NZ dollar was at US74.20c from US73.88c at 5pm yesterday. It dipped to an 11-week low around US73.30c yesterday.
Against the Australian dollar, the
NZ dollar slipped to A74.76c at 5pm from A74.77c at 8am from A74.97c at 5pm. Yesterday it dropped to around A74.30c, its lowest since October 2000.
BNZ said the NZ dollar is likely to be generally weak against the Australian dollar next year.
The Australian economy is predicted to grow by 3.2 per cent over 2011 with interest rates certain to rise further as inflationary pressures build because of the boom and a lack of resources. As interest rates rise the chances are the NZ dollar will be weak against the Australian dollar.
A focus in New Zealand next week will be September quarter gross domestic product data due on December 23. The Reserve Bank of New Zealand expects a 0.3 per cent rise.
GDP data was dated but it had potential to throw the market around, Westpac said.
"Markets trimmed the kiwi exchange rate by half a cent after the downside surprise last quarter. But markets have become used to downside surprises in New Zealand, almost to the point of fatigue.
"We suspect that an upside surprise on the Q3 GDP figures would have a larger impact on market pricing than a downside surprise, as it would do more to alter the dominant mindset," Westpac said.
The NZ dollar was little changed at 62.19 yen at 5pm from 62.21 yen at the same time yesterday and at 0.5582 euro from 0.5589 euro yesterday.
The trade weighted index rose to 66.97 from 66.93 yesterday.
- NZPA
