Kiwi holds against USD

The New Zealand dollar was little changed, benefiting from ongoing US dollar weakness despite initially falling on weaker-than-expected domestic economic growth.

The kiwi dollar traded at US73.27c at 5pm yesterday, unchanged from 8am and versus US73.39c late on Wednesday. The trade-weighted index slipped to 74.95 from 75.07.

The kiwi fell around a quarter of a US cent early in the session on news that the economy expanded 0.6 per cent in the three months to December 31 versus an expected 0.8 per cent as unfavourable weather weighed on agricultural output.

“The currency market reacted to the weak headline number but when you dig into the details it is not a terrible story and now we are right back where we started,” said senior macro strategist at ANZ Bank New Zealand Phil Borkin.

BNZ head of research Stephen Toplis said the dip was “of little concern” as “the economy remains in generally good nick supported, in particular, by ongoing strength in household spending, the services sector and strong terms of trade.”

Borkin said the kiwi was also continuing to benefit from US dollar weakness on growing fears of a possible trade war. “Domestic events are certainly taking a back seat to global themes,” he said.

The kiwi eased to A93.01c from A93.19c on Wednesday. The kiwi traded at 59.20 euro cents from 59.16c and at 52.39 British pence from 52.48p.

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