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Kiwi down vs greenback on pullback in risk

AAP logoAAP 17/04/2018 Rebecca Howard

© Getty The New Zealand dollar fell against the greenback on Tuesday on a slight pullback in risk appetite after minutes from the Reserve Bank of Australia showed some caution and after mixed Chinese data.

The New Zealand dollar was trading at US73.38c as at 5pm in Wellington from US73.55c as at 8am and from 73.54c Monday.

In minutes of its April 3 policy meeting published Tuesday, the Reserve Bank of Australia saw little reason to raise interest rates this month given inflation remained below target.

However, it also said "the possibility of an escalation in trade restrictions represented a risk to the global outlook that needed to be monitored closely", and noted "developments in US money markets had flowed through to higher short-term borrowing costs in financial markets in Australia''.

"There is a little bit of risk off as people seem to have interpreted the RBA minutes as a little cautious, highlighting funding pressures and concerns over trade," said ANZ senior macro strategist Philip Borkin.

He also said Chinese data was mixed and the market seems to have focused on the weaker aspects. China's economy expanded at 6.8 per cent in the first quarter, which was in line with expectations he said.

However, retail sales data was better than expected and industrial production was weaker.

The data weighed on both the kiwi and the Aussie and the NZ dollar traded at A94.48c from 94.61 Monday.

Mr Borkin said markets will now be watching for the overnight dairy auction, expected to show a slight pull back on increased supply on the platform. Key, however, this week is the first-quarter inflation data due Thursday, with economists expecting annual inflation of 1.1 per cent.

The kiwi dollar was at 51.16 British pence from 51.58 pence late Monday and traded at 78.57 yen from 78.86 yen. It fell to 59.26 euro cents from 59.63c and declined to 4.6105 yuan from 4.6207 yuan.

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