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Kiwi falls vs Aussie to dash parity run

NZN 7/06/2017 Rebecca Howard

The New Zealand dollar fell against the Australian dollar on Wednesday when gross domestic product data across the Tasman wasn't as weak as some analysts had been expecting.

This dashed chances of an immediate run at parity.

The kiwi fell to A95.08c as at 5pm in Wellington versus A95.67c at 8am and from 95.53c Tuesday. It was trading at US71.69c as at 5pm in Wellington versus 71.56c Tuesday.

The kiwi had gained 5.5 per cent against the Aussie from its low in mid-March, prompting some strategists to ponder whether the kiwi has a chance of reaching parity with its Australian counterpart.

However "our parity party is looking a bit forlorn this afternoon," said Tim Kelleher, head of institutional foreign exchange sales at ASB Bank.

Part of the move is because a large section of the market was picking the kiwi to appreciate ahead of the data and given the sharp gain over recent weeks some pullback was to be expected, he said.

Australia's GDP expanded 0.3 per cent in the three months through March from the fourth quarter of 2016 and grew 1.7 per cent from a year ago, data from the Australian Bureau of Statistics showed Wednesday.

While economists polled by The Wall Street Journal had expected 0.3 per cent growth on quarter some had expected the GDP to dip into negative territory.

Mr Kelleher said positive growth meant "Australia may have dodged a bullet on this one" but that "it doesn't take anything out of play" in terms of parity.

"I haven't changed my opinion, we still look a lot better from a distance than they do."

The kiwi was at 63.65 euro cents from 63.53 cents and rose to 55.59 British pence from 55.37 pence. The kiwi traded at 78.57 yen from 78.66 yen and increased to 4.8699 Chinese yuan from 4.8656 yuan.

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