The New Zealand dollar is treading water after running out of puff at higher levels and after conflicting data from China.

The kiwi was trading at 68.40 US cents at 5pm in Wellington from 68.52 at 8am and at 96.80 Australian cents from 96.63. The trade-weighted index was at 74.21 points from 74.23.

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Sheldon Slabbert, a dealer at CMC Markets, says a weaker US dollar overnight had pushed the New Zealand dollar higher and it had been threatening to break through 97 Australian cents again. It reached 97.11 yesterday, but couldn't break through concerted selling at such levels.

The Chinese data showed industrial output fell to a 17-year low in the first two months of the year, pointing to further weakness. However, other data showed retail sales in January and February rose 8.2 percent from a year earlier, a little better than the 8.1 percent increase economists had forecast.

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Slabbert says interest rate differentials are also going against the New Zealand dollar. Yesterday the 10-year swap rate fell to a record low at 2.3150 percent but bounced a little to 2.3425 today while the two-year swap rate rose from 1.8157 percent to end at 1.8185 today.

US 10-year Treasury bonds are trading at a significantly higher 2.6110 percent.

"Interest rate differentials are really the guts of the currency markets and it's not really favouring us," Slabbert says.

But the New Zealand economy is still relatively rosy by international comparisons, even if it's no longer the "rock-star economy" some thought it, he says.

Next Thursday's GDP data for the December quarter will be a key factor in whether the kiwi can hold its current strength.

The data "has some heavy lifting to do – that report card had better look good," Slabbert says.

The New Zealand dollar was at 51.60 British pence from 51.81, at 60.41 euro cents from 60.47, at 76.27 yen from 76.12 and at 4.5894 Chinese yuan from 4.5959.