The New Zealand dollar fell in response to worse-than-expected gross domestic product data then recovered today.
The local currency closed its domestic session at US64.50c, little changed from the US64.51c at 8am and up from US64.16c at 5pm yesterday. The range today was US64.10c to US64.69c.
News that the New
Zealand economy shrank 1 per cent in the March quarter in its fifth consecutive quarterly contraction knocked the NZ dollar from US64.65c to US64.20c. The market consensus was for a 0.7 per cent contraction.
"We bounced back on the back of a stronger aussie and stronger euro," one dealer said.
The US sharemarket's rally on improved risk appetite reduced the US dollar's safe-haven status, which had earlier been boosted by an unexpected rise in US jobless claims data.
Analysts are eyeing large maturities of bonds issued in offshore markets in NZ dollars in the next month. This could put pressure on the NZ dollar but there is a debate about whether it will or not.
"We've now got economic data out of the way so we will be trading on the back of the US dollar and equity markets over the weekend," he said.
The NZ dollar was little changed at 0.4589 euro from 0.4596 at 5pm yesterday, and was up a little against the Japanese currency to 61.85 yen from 61.80.
Against the Australian dollar, the NZ dollar eased to A79.96c from A80.12c yesterday, while the trade weighted index rose to 60.84 from 60.74 yesterday.
Currency rates:
NZ dlr/US dlr US64.50c US64.16c
NZ dlr/Aust dlr A79.96c A80.12c
NZ dlr/euro 0.4589 0.4596
NZ dlr/yen 61.85 61.80
NZ dlr/stg 39.32p 38.99p
NZ TWI 60.84 60.74
Aust dlr/US dlr 80.62c 80.09c
Euro/US dlr 1.4055 1.3959
US dlr/yen 95.87 96.32
- NZPA
