Sentiment for the kiwi dollar is turning at last after a plethora of good news, but the unit is restrained by its Australian counterpart.
Excellent trade figures yesterday for the month of May followed good March quarter balance of payments numbers on Tuesday, and hopes are high for sound March quarter gross domestic product (GDP) data today
The kiwi finished a shade weaker than Wednesday's 41.67USc close. It easily outperformed the aussie, which ended weakly at 51.82USc (52.00USc Wednesday), and gained on the cross to 80.40Ac (80.14Ac).
A dealer said the currency would struggle as long as the aussie limped below 52USc, irrespective of tomorrow's growth numbers.
The Australian dollar holds the key, but pent-up kiwi optimism is unlikely to be fully released for an assault on stiff resistance at 42USc until the more tenuously linked euro decisively breaks above 86USc.
"If we had a bit more support from that area the kiwi and aussie would be higher," the dealer said.
The aussie fell yesterday for no particular reason, and she put it down to trade flows.
Deutsche Bank chief economist Ulf Schoefisch said he was unsure whether the data suggested that the NZ dollar was undervalued.
The country had high debt levels and the current account deficit, while improving well, was still 4.8 per cent of GDP.
- NZPA
<i>Currency:</i> Kiwi hinges on aussie
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