Kiwi gains on hawkish numbers

The New Zealand dollar gained yesterday after revised figures showed the economy on a strongerthan-expected growth track.

This added to the prospects of a rate hike sooner than the Reserve Bank has flagged.

The kiwi rose to US70.07c as at 5pm from US69.61c late Wednesday.

While the 0.6 per cent third-quarter growth was in line with expectations the second-quarter rate was revised up to 1 per cent from 0.8 per cent.

The “significant upward revisions to history are a deal-breaker for the markets”, said Annette Beacher, chief Asia-Pac macro strategist for TD Securities.

The “upgrades to growth, low unemployment and forthcoming outsized fiscal spending all demand another hawkish tilt from RBNZ Governor Spencer,” which supports the kiwi dollar.

Ross Weston, a senior trader at Kiwibank, said the market may have been expecting a poorer number and so it rallied on the news, in particular, the revisions.

He noted, however, trading is very light and the GDP data was the last major event “before New Zealand shuts down for the holiday period”.

While there will be little to push the kiwi around in the next few sessions, thin trading can increase volatility, he said.

The kiwi rose to 79.46 yen from 78.76 yen after the Bank of Japan kept monetary policy steady despite growing signs of strength in the economy. It traded at A91.39c from A90.89c Wednesday and at 4.6018 Chinese yuan from 4.5903 yuan. It traded at 59.04 euro cents from

58.74c and rose to 52.42 British pence from 51.96p. — AAP