The New Zealand dollar survived today's GDP data unscathed after it took a pounding on worse than forecast current account figures yesterday.
The March quarter GDP data printed bang on expectations at plus 0.7 per cent and the currency sat pat afterwards.
It ended on US61.10c, having slid in busy overnight trading to a two-month low of US60.75c from over US62c before the current account figures.
The GDP outcome was slightly stronger than predicted by the Reserve Bank, which had expected 0.5 per cent growth for the quarter and 2.1 per cent for the year.
Nothing in the figures was expected to hasten a move by the Reserve Bank to lower official interest rates, with opinion firming that the first cut will not be until early next year at least, economists said.
That should help prop the kiwi, dealers said.
Yesterday, it suffered its biggest daily fall in three months.
The kiwi also steadied during the day against the currencies of our major trading partners following yesterday's sharp fall.
At 5pm it was buying A83.08c from A83.98c at the same time yesterday. The TWI was at 61.77 from 62.55, 24 hours earlier.
The Australian dollar ended on US73.45c from US74.09 here yesterday.
ANZ Investment Bank said the kiwi was "resting perilously".
It would be a stretch to attribute the New Zealand's dollar's overnight weakness solely to yesterday's figures showing the annual current account deficit topped a record $14.5 billion, equating to 9.3 per cent of GDP, ANZ said.
Support levels for the kiwi had collapsed overnight during "extremely heavy" selling of most currencies against the US dollar.
The US dollar hovered near a two-month high against the yen ahead of an expected bump up in US interest rates next week and on caution over the fate of Bank of Japan Governor Toshihiko Fukui.
The dollar was buoyed the previous day by rumours that Federal Reserve officials, possibly including chairman Ben Bernanke, had met with bond market participants on Wednesday.
Such talk fanned speculation the Fed might raise rates by half a percentage point when it meets next week, although most traders were sceptical and stuck to forecasts for a rise to 5.25 per cent from the current 5 per cent.
The following are Reuters currency rates:
5pm today 5pm Thursday
NZ dlr/US dlr US61.10c US61.65c
NZ dlr/Aust dlr A83.08c A83.20c
NZ dlr/euro 0.4850 0.4865
NZ dlr/yen 70.78 70.80
NZ dlr/stg 0.3337 0.3367
NZ TWI 61.77 62.03
Australian dollar US73.45c US74.09
Euro/US dollar US1.2576 US1.2678
US dollar/yen 115.98 114.84
- NZPA
<i>Currency:</i> NZ dollar survives GDP data unscathed
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