Gross domestic product grew 1.0 per cent in the first quarter, and by 3.1 per cent from a year earlier, the Australian Bureau of Statistics said. The last time it grew as strongly on an annual basis was in the second quarter of 2016. Economists had expected 0.9 per cent growth on quarter and 2.9 per cent on year.
"Looking at the main indicators, it does look pretty strong... RBA pricing for hikes will probably go up a notch and the Aussie will remain bid, at least for now," said Westpac Banking Corp market strategist Imre Speizer.
Paul Dales, chief Australia and New Zealand economist for Capital Economics, said, however, the data is unlikely to sway the RBA given the Royal Commission has prompted tighter credit conditions.
Looking ahead, Speizer said there is little data in the short term that might push the Kiwi around. He said investors will be waiting for the upcoming Group of Seven summit later this week in particular given recent disagreement over US metals tariffs.
A senior Canadian government official said discussions on the global economy on the first day of the summit, which is scheduled for Friday and Saturday, would quickly turn to trade issues, according to Reuters.
"There will be disagreements on important issues and tariffs will certainly be one of them," the official was quoted as saying.
The kiwi fell to 52.52 British pence from 52.75 pence late yesterday and traded at 60.08 euro cents, unchanged from yesterday. The kiwi edged up to 77.39 yen from 77.19 yen and traded at 4.5014 yuan from 4.5008 yuan. The trade-weighted index was little changed at 73.58 from 73.53.
New Zealand's two-year swap rate was unchanged at 2.22 per cent, while 10-year swaps rose two basis points to 3.16 per cent.
