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NZ dollar slips as greenback lifts

NZ Newswire logoNZ Newswire 26/01/2017 Jonathan Underhill

The New Zealand dollar fell against a broadly stronger US dollar that was helped by improving US data in a market where equities are charting record highs.

The kiwi declined to 72.47 US cents as at 8am in Wellington from 72.84 cents late on Thursday. The trade-weighted index fell to 79.29 from 79.42.

The local currency gained on Thursday after figures showed inflation has moved back within the Reserve Bank's target band and has accelerated more than the bank was projecting.

The US dollar index had retreated since reaching a 15-year high at the start of this month on euphoria over US President Donald Trump. It rose overnight after data including the Markit Services PMI, which chalked up its 11th straight month of growth and the Dow Jones Industrial Average topped 20,000 for the first time.

"US data by and large beat expectations overnight, highlighting improving growth momentum," said ANZ's David Croy.

"Having distanced itself from post-election correlations with bond yields and equities, the USD has made a comeback, to the detriment of the NZD. This is likely to continue as Trump cements his credentials as a man of action (regardless of one's views on those actions)."

The kiwi traded at 96.03 Australian cents from 96.14 cents, it was at 4.9843 yuan from 5.0099 yuan, rose to 67.75 euro cents from 67.68 cents, dropped to 57.51 British pence from 57.59 pence and lifted to 82.92 yen from 82.53 yen.

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