The New Zealand dollar fell to its lowest levels in about a month ahead of figures that are expected to show economic growth slowed in the first quarter, undershooting the Reserve Bank's forecast.
The kiwi dollar fell to 68.60 US cents as at 8am in Wellington, and earlier touched 68.57 cents, from 69.01 cents late yesterday. The trade-weighted index fell to 72.95 from 73.33.
Economists expect the New Zealand gross domestic product grew 0.5 percent in the first quarter, down from 0.6 percent in the final quarter of 2017. That's in contrast to the Reserve Bank, which projected growth to pick up to 0.7 percent in the first quarter, according to its monetary policy statement last month. The bank signalled it doesn't expect to raise interest rates until the second half of 2019.
"The NZD sits at the bottom of the G10 currency leaderboard, ahead of today’s Q1 GDP report," said Doug Steel, an economist at Bank of New Zealand, in a note. "We think 0.5 percent, but sense more downside risk than upside. Even if there are identifiable one-off negatives in the quarter, headlines of a soggy economy won’t help the NZD."
The kiwi is weaker against a greenback that is trading near an 11 month high on a US dollar index basis, amid ongoing fears of a trade war with China although US Commerce Secretary Wilbur Ross tried to soothe fears by saying the US was aiming for free trade, not a trade war. Global tensions have been high since US President Donald Trump threatened Monday to hit US$200 billion of Chinese imports with 10 percent tariffs if Beijing retaliated against his previous targeting of US$50 billion in imports.
The kiwi didn't move much yesterday after figures showed the current account deficit widened to a seasonally adjusted $3.1 billion in the March quarter versus a seasonally adjusted $2 billion deficit in the December quarter. According to Stats NZ, the seasonally adjusted deficit due to a drop in exports and record high imports.
The kiwi fell to 93.09 Australian cents from 93.31 cents yesterday. It fell to 4.4393 yuan from 4.4693 yuan and dropped to 75.72 yen from 76.02 yen. It fell to 59.22 euro cents from 59.64 cents and declined to 52.04 British pence from 52.44 pence.