NZ dollar steady, strong against euro

The New Zealand dollar closed with little movement as economic growth data released today was in line with market expectations.

Statistics New Zealand showed Gross Domestic Product (GDP) rose 0.8 per cent in the December quarter, with the manufacturing sector helping its growth.

But the NZ dollar remained stable buying US 70.30c at 5pm from US70.31c at 8am, and US.70.37c at 5pm yesterday.

Against the euro, the Kiwi maintained its strength after climbing to a new two-year high overnight. The euro weakened when a rating downgrade for Portugal added to worries about debt levels and growth in the euro zone's smaller countries.

It was buying 0.5273 euro at 5pm, a minuscule increase from 0.5271 at 8am, and up from 0.5230 at 5pm yesterday.

ANZ chief foreign exchange dealer Murray Hindley said eyes will be on the EU Summit tonight, where Greece's fiscal problems and Portugal rating downgrade will be discussed.

"If they come out with some risky package for Greece, than obviously you may see risk back on the table, and you may see a bounce in Euro and Kiwi," he said.

The NZ dollar dropped against the Australian and Japanese currencies, however.

At 5pm, it was buying A77.16c from A77.37c at 8am, though slightly higher than A76.73c at 5pm yesterday.

Mr Hindley said the fall against the Aussie was due to RBA assistant governor Philip Lowe's statements yesterday, signalling an increase of Australian interest rates to normal levels in the months ahead.

Against the yen, the dollar was down to 64.54, compared to 64.74 at the local open, but higher than 63.67 at 5pm yesterday.

The trade weighted index fell to 65.63 from 65.68 at 8am, though up from 65.28 at 5pm yesterday.

- NZPA