NZ dollar rises as economy dodges double dip recession

Photo / Martin Sykes

The New Zealand dollar rose after figures showed the economy narrowly dodged a double dip recession in the fourth quarter of last year.

The kiwi dollar rose to 74.24 US after Statistics New Zealand released numbers showing the economy grew by 0.2 per cent in the three months ended December 31, and was last at 74.21 cents from 74 cents immediately beforehand.

The economy contracted 0.2 per cent contraction in the third quarter and the fourth-quarter GDP beat a Reuters survey picking 0.1 per cent growth.

A technical recession is two consecutive quarters of economic contraction.

"All the talk around the traps was that we could see a negative number, and that was what markets were bracing for," said Mike Jones, markets strategist at Bank of New Zealand.

"That's why we saw a bit of a relief rally but nothing notable."

On a trade weighted basis the kiwi rose to 65.12 from 64.94 before the announcement, and rose to 73.27 Australian cents from 73.05 cents before hand.