KEY POINTS:
The New Zealand dollar softened today after data confirmed the economy had headed further into recession, but the news was as expected and created little excitement.
By 5pm, the kiwi had eased a touch to US57.47c from US57.60c late yesterday afternoon. Against the Australian dollar, the kiwi had softened to A83.94c from A84.60c yesterday.
Gross domestic product contracted 0.4 per cent in the September quarter, following falls of 0.3 per cent in the March quarter and 0.2 per cent in the June quarter.
That made it the worst run of GDP data since the recession of 1989/90, and economists expect the Reserve Bank to lower interest rates by as much as one percentage point to 4 per cent at its next review in January.
"In the bigger picture it just confirms again the economy continues to slip into recession, and our overall expectation is obviously that's going to continue into next year and make 2009 pretty dreary," said Jake Soanes, head of financial market sales at Westpac.
A greater influence on the kiwi was generally a weaker US dollar, likely to keep the currency trading between a range of US54c to US60c.
"At the moment we're seeing good exporter demand on any dips, and we're looking for importers to sell above US60c in the next two weeks," Mr Soanes said.
The US dollar was steady against the yen after the Bank of Japan followed last week's interest rate cut with a warning that Japan's economy had deteriorated and was likely to get worse.
Trading was quiet around the region ahead of the Christmas holiday at the end of the week.
Currency rates:
NZ dlr/US dlr US57.47c US57.60c
NZ dlr/Aust dlr A83.94 A84.60c
NZ dlr/euro 0.4100 0.4120
NZ dlr/yen 51.84 51.90
NZ dlr/stg 38.71p 38.65p
NZ TWI 55.98 56.20
Aust dlr/US dlr US68.48 US68.10
Euro/US dlr 1.4018 1.3984
US dlr/yen 90.21 90.11
- NZPA
