The New Zealand dollar that edged lower after showing a weaker-than-expected third quarter Gross Domestic Product figures at the beginning of Thursday’s Asian session recouped some of its losses shortly.
Statistics NZ reported today that the nation’s GDP was minus-0.2 percent compared to the preceding quarter. For the full year to Q3, GDP growth was 1.5 percent.
Both results were below analysts’ estimates of 0.2 percent quarterly expansion and 1.9 percent annual growth.
Finance Minister Bill English said the New Zealand economy was still on the path to recovery and that he was “actually quite confident that the economy will build momentum in 2011 and beyond”.
Latest data was well below the Reserve Bank of New Zealand forecast that was expecting the GDP to rise 0.3% over the September quarter, signaling the central bank will hold the benchmark interest rate at 3% until the middle of next year.
Last month, Standard & Poor’s slashed New Zealand’s foreign currency outlook to negative from stable because of a widening current account deficit and credit risks in its banking sector.
Immediately after the GDP data, the New Zealand dollar fell below the 1.3530 against the Australian dollar for the first time in more than ten years. However, the domestic unit recovered shortly to reach as high as 1.3447 before leveling off.
The New Zealand dollar that slumped to a fresh 7-week low of 61.77 against the yen reversed direction shortly to touch above 62.10 and the pair moved in a holding pattern thereafter. The kiwi-yen pair settled Wednesday’s North American trading at 61.88.
The New Zealand dollar pushed higher to 1.7648 against the euro after falling to 1.7730 earlier in the session. The euro-kiwi pair, which finished Wednesday’s North American deals near 1.77, is presently quoted at 1.7650.
The euro has been in a descending track this week after the rating agencies Moody’s put Portugal and Fitch Ratings placed Greece on review for a possible downgrade.
The New Zealand dollar that fell to a 2-day low of 0.7391 against the US dollar after the data staged a brief rebound shortly. The kiwi-greenback pair is presently trading at 0.7435, up from 0.7405 hit late New York Wednesday.
Overnight data from the U.S. showed that gross domestic product increased at an annual rate of 2.6 percent in the third quarter compared to the previously reported 2.5 percent growth. Economists had been expecting the pace of growth to be upwardly revised to about 2.8 percent.
Looking ahead, French consumer spending and producer prices reports are expected in the upcoming European session.
Turning to the U.S., weekly jobless claims, consumer sentiment and new home sales reports are likely to be in focus in the North American session along with data on durable goods orders and personal income and spending.