Dollar lacklustre after building data

File photo / Dean Purcell

The New Zealand dollar ended the day yesterday pretty much where it ended on Monday, having recovered from a fresh 18 year low against the Australian currency overnight.

By 5pm yesterday, the kiwi was at US73.75c, unchanged from late Monday afternoon and marginally stronger than US73.64c yesterday morning.

Against the Australian dollar, the kiwi was at A72.87c, a touch above the same time on Monday and little changed from A72.89c yesterday morning. Around 4am, the kiwi had dropped to A72.42c. It has been in sharp decline against the aussie since late January, with New Zealand interest rates tipped to fall and Australia's central bank expected by some to raise rates later this year.

Market reaction was muted to building work figures released yesterday, ahead of the Reserve Bank's interest rate decision tomorrow and with the Christchurch earthquake two weeks ago making the figures more than a little historical.

The seasonally adjusted volume of building activity rose 1.1 per cent in the three months to the end of December, including a 10.6 per cent rise in non-residential building work and a 7.1 per cent fall in residential work.

While the data did not necessarily change forecasts of a 0.2 per cent increase in GDP in the fourth quarter, ANZ economists said negative GDP for the quarter remained possible, which would mean a technical recession since the second half of last year.

The kiwi was steady against the euro and yen, at €52.75c and 60.67, but stronger against sterling, at £45.51p from £45.38p on Monday.

The trade weighted index was unchanged at 65.01.

The euro gave up a little ground having hit a four-month high around US$1.4036 overnight, as investors boosted the US dollar and booked profits.

- NZPA