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Kiwi slips as US GDP revised up

NZ Newswire logoNZ Newswire 30/03/2017 Jonathan Underhill

The New Zealand dollar has fallen against the greenback after US fourth-quarter gross domestic product was revised up and gained versus the euro after weaker than expected inflation data from Spain and Germany.

The kiwi declined to US70.02 cents as at 8am on Friday in Wellington from US70.26c late Thursday. It rose to 65.48 euro cents, the highest in 10 days, from 65.33c.

The third estimate for US fourth-quarter GDP was a revision up to 2.1 per cent annualised rate from 1.9 per cent previously reported, reflecting a gain in consumer spending.

The US dollar rose to a two-week high against a basket of currencies, helped by a weaker euro amid speculation the European Central Bank won't soon unwind its policy of providing extraordinary stimulus to the regional economic bloc.

Adding to that speculation, Germany's annual inflation slowed to 1.5 per cent on an EU harmonised basis in March from 2.2 per cent in February, while in Spain the pace slowed to 2.1 per cent from 3 per cent.

"Some broadly-based USD strength sees the NZD just holding above the 0.70 mark, near the bottom of the 1 cent range it has traded within the past couple of weeks," said BNZ currency strategist Jason Wong.

Economists are expecting euro-zone inflation data due on Friday will show inflation in the region slowed to 1.8 per cent in March from 2 per cent.

On Friday morning, the kiwi fell to 56.10 British pence from 56.44p, paring back some of the gains since UK Prime Minister Theresa May officially triggered Britain's exit from the European Union.

It slipped to 91.41 Australian cents from A91.64c and rose to 78.32 yen from 78.14 yen. It fell to 4.8216 yuan from 4.8435 yuan. The trade-weighted index was little changed at 76.03 from 76.17.

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