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Kiwi slips in quiet start to week

NZ Newswire logoNZ Newswire 28/05/2017 Jonathan Underhill

The New Zealand dollar has started the week on a weaker footing, with bank holidays in the US, China and the UK likely to keep trading subdued.

The kiwi declined to US70.44 cents as at 8am on Monday in Wellington, down from US70.71c in New York on Friday and up from US70.14c in Asia at the end of last week.

The trade-weighted index slipped to 76.32 from 76.47 in New York.

US first-quarter gross domestic product grew a revised annual 1.2 per cent in the first quarter, up from an initial estimate of 0.9 per cent, the Commerce Department said. That was the weakest rate in a year as the US economy slowed from a 2.1 per cent pace in the fourth quarter, but other indicators of the world's biggest economy have pointed to a sturdier rate of growth.

"US economic growth slowed less sharply in the first quarter than initially thought, but the weakness was likely an aberration amid a strong labour market that is near full employment," traders at HiFX said in a note.

With little domestic economic news scheduled, traders will likely look for offshore events to drive the direction to the kiwi.

European Central Bank President Mario Draghi's appears before the European Parliament Economic Committee on Monday. Expectations are rising that the ECB will signal that its easy policy stance might need to be tweaked if euro-zone data continue to paint a more positive economic outlook.

In the US, the Fed also releases its Beige Book on Wednesday.

On Monday morning, the kiwi fell to 94.68 Australian cents from A94.96c in New York on Friday and fell to 4.8269 yuan from 4.8433 yuan.

The kiwi declined to 63.03 euro cents from 63.28c, dropped to 54.99 British pence from 55.18p and fell to 78.34 yen from 78.60 yen.

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