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Kiwi falls vs Aussie and greenback

NZN 1/03/2017 Rebecca Howard

The New Zealand dollar fell against the Australian dollar on Wednesday after strong economic growth figures across the Tasman.

It also lost ground against the greenback as the market seemed to shrug off a lack of detail in US President Donald Trump's speech to the Joint Session of Congress.

The local currency fell to A93.23c as at 5pm from 94.02c as at 8am and 93.47c late Tuesday after Australia's economy grew 1.1 per cent in the three months through December, beating economists forecasts.

Gross domestic product rose 2.4 per cent from a year earlier. "The decent rebound in real GDP in the fourth quarter doesn't just dash any lingering fears that Australia was in a recession, but it also boosts hopes that the surge in commodity prices will trigger a rapid recovery," said Paul Dales, chief Australia and New Zealand economist for Capital Economics.

The New Zealand dollar also fell to US71.45c as at 5pm from 72.17c as at 8am and 71.82c late on Tuesday.

Ross Weston, FX trader at Kiwibank, said he thought the market would have been disappointed by Mr Trump's speech as it was "lacking detail" such as solid figures, dates, and time frames.

Still, "the US dollar has certainly found some favour," he said, adding the catalyst could be the increase in defence spending and proposed legislation that would produce a US$1 trillion investment in US infrastructure.

Domestically, he said investors will be watching for a speech on Thursday from Reserve Bank governor Graeme Wheeler. In an interview with Politik published on Wednesday, Mr Wheeler reiterated concern about the potential impact of Mr Trump's 'America First' trade policies on New Zealand.

The kiwi was trading at 57.77 British pence from 57.78 pence and 67.77 euro cents from 67.84 cents. It was at 81.02 yen from 80.90 yen and at 4.9143 from 4.9341 yuan.

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