The New Zealand dollar held near US72c today after China reported its economy expanded 10.3 per cent in the second quarter over a year earlier.
This is down from the first quarter's explosive 11.9 per cent expansion, but dealers said the growth and other Chinese data was better than the level expectations had been managed to.
The NZ dollar was US72.00c at 5pm, down from US72.30c at 8am. It had surged to a two-month high US72.55c on Wednesday night from US71.64c at 5pm yesterday.
"It went up to US72.40c but came off between the end of New York and before the Chinese numbers. We went back up to US72.40c on the Chinese numbers but drifted back again," one dealer said.
There is resistance around the US72.40c level the NZ dollar has bounced off a couple of times. Support is around US71.80c.
The performance of equity markets overnight will be a factor in determining future direction and attention is also turning to New Zealand's Consumer Price Index (CPI) data tomorrow.
"We anticipate Friday's CPI data will show that June was the last of three subdued quarters for inflation. Prices barely budged in the six months from October 2009 to March 2010, as weak demand kept a firm lid on the price of domestically produced goods and services, and the strong exchange rate forestalled increases in imported or import-competing products," Westpac said in a preview.
The market is expecting a 0.4 per cent rise in the June quarter CPI to an annual rate of 1.9 per cent, while the Reserve Bank of New Zealand is expecting a 0.5 per cent figure for the quarter.
A "veritable maelstrom" will push annual inflation to 5.1 per cent by June 2011 but the central bank is expected to look through the wide range of rising government charges and focus on inflationary expectations.
The NZ dollar rose against the Australian dollar to A81.78c at 5pm from A81.30c at the same time yesterday.
The NZ dollar also reached a fortnight high 0.568 euro early today and was 0.5650 by 5pm from 0.5636 euro at the same time yesterday.
The NZ dollar pushed to a three-week high near 64.30 yen early today, and by 5pm was 63.38, from 63.73 yesterday.
The trade weighted index was 68.08 at 5pm from 67.86 yesterday.
- NZPA
NZ dollar holds near US72c
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