The New Zealand dollar pared some of its gains after the US Federal Reserve lifted rates but kept the track for further hikes unchanged after the domestic growth picture was softer than expected.
The kiwi dollar was trading at 69.91 US cents as at 5pm in Wellington versus 70.24 US cents as at 8am and 69.31 cents late yesterday. The trade-weighed index was at 76.07 from 75.97.
The US dollar took a tumble when the Fed kept to its projection for two more increases this year. "The market got the rate hike but not the icing on the cake, which would have been an additional dot plot for this year and that's what the noise has been about today," said OMF private client advisor Stuart Ive.
The kiwi dollar shot up about 1 US cent but then fell back when the domestic fourth quarter gross domestic product data was weaker-than-expected. The GDP expanded 0.4 per cent in the three months ended December 31, following a revised 0.8 per cent increase in the September quarter, Statistics New Zealand said. Economists had been expecting growth of 0.75 per cent while the central bank tipped growth of 1.0 per cent on quarter.
"Following today's data we remain comfortable with our view that there is no rush to raise the OCR anytime soon," said Kiwibank chief economist Zoe Wallis.
