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Kiwi near 10-month low on sluggish spend

NZ Newswire logoNZ Newswire 30/04/2017 Paul McBeth

The New Zealand dollar has traded near a 10-month low after data showed sluggish consumer spending weighed on US economic growth, ahead of the Federal Reserve's monetary policy meeting this week.

The kiwi traded at US68.56 cents as at 8am on Monday in Wellington from US68.66c on Friday in New York, hovering near the US68.45c low it reached on Thursday. The trade-weighted index declined to 74.55 from 74.72 last week.

New Zealand's dollar fell 1.5 per cent against the greenback in April, a month when heightened uncertainty in the global environment kept markets volatile. The greenback has been benefiting from expectations the world's biggest economy's strength will spur higher interest rates.

Figures last week showed gross domestic product grew at an annualised rate of 0.7 per cent in the March quarter, falling short of forecasts on weaker consumer spending, while labour data showed rising employment costs ahead of the Fed's policy review this week.

"The market appeared to brush off the weaker headline US GDP report after underlying details gave a better forward-looking picture," ANZ chief economist Cameron Bagrie said in a note.

He said if the kiwi's decline below US68.60c was sustained, it could push to mid-66 cents.

"This weakness is at odds with local data, but global nuances are dominating. The finger can partly be pointed at protectionist nuances."

On Monday morning, the kiwi was little changed at 52.96 British pence from 53p on Friday in New York and fell to 62.80 euro cents from 63c last week.

It traded at 91.74 Australian cents from A91.63c last week and fell to 4.7238 Chinese yuan from 4.7307 yuan. It dropped to 76.28 yen from 76.58 yen.

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