The kiwi booked decent gains today as figures showed the economy raced ahead much faster than expected in June quarter -- raising expectations of a interest rate hike next month.
Shortly after the data was released this morning the kiwi hit an intraday high of US69.22c, but by 5pm it had settled back to US69.05c, up from US68.28c at the same time yesterday.
Gross Domestic Product (GDP) figures released by Statistics New Zealand (SNZ) today showed the economy expanded by 1.1 per cent in the June quarter, well up on the 0.5 to 0.9 per cent range forecast by economists.
The Reserve Bank is struggling to contain inflation within its target range and today's data could trigger another rate rise when the RB holds its next review on October 27.
But economists have mixed views on whether the official cash rate will be hiked above its current 6.75 per cent.
ANZ National Bank chief economist John McDermott says as well as the GDP figures his bank's business confidence survey, which was published today showed a worrying rise in inflation expectations.
"Now, we are as certain as you can ever be that the Reserve Bank will increase interest rates in October," he said. But other economists disagreed, with Goldman Sachs JBWere economist Shamubeel Eaqub saying a rate rise now would be a "policy mistake".
The following are Reuters currency rates:
5pm (Wednesday)
NZ dlr US69.05c US68.28c
NZ dlr/Aust dlr A90.85c A90.20c
NZ dlr/euro 0.5725 0.5674
NZ dlr/yen 77.99 77.21
NZ dlr/stg 39.03p 38.57p
NZ TWI 70.06 69.37
Australian dollar US76.00c US75.71c
Euro/US dollar US1.2062 US1.2037
US dollar/yen 112.94 113.06
- NZPA
<EM>Currency:</EM> Kiwi rallies on stronger than expected GDP growth
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