NZ dollar recovers ground as greenback falls from 11-month high

The kiwi traded at 51.91 British pence from 51.97 pence yesterday.Photo: Lynn Grieveson

The New Zealand dollar rose as the greenback fell from an 11-month high amid weaker-than-expected US data and was little changed against the pound on signs the Bank of England may be closer to hiking interest rates.

The kiwi dollar rose to 68.78 US cents as at 8am in Wellington from 68.37 cents late yesterday. The trade-weighted index rose to 73.12 from 72.83 yesterday.

Overnight the Philadelphia Federal Reserve's gauge of US Mid-Atlantic business activity fell to a 1-1/2 year low of 19.9 versus expectations of a 29 reading. The pound strengthened after Bank of England chief economist Andy Haldane switched his position to call for a rate hike from standing unchanged.

"Support levels gave way for the NZD during yesterday’s local session, but moves failed to push on, with the USD running into some weakness," Miles Workman, an economist at ANZ Bank New Zealand, said in a note. "However, we expect the kiwi to continue to trade in a defensive manner. With the economy showing signs of cooling and global risk sentiment jittery, it is hard to get too positive here."

Today traders will be watching for New Zealand migration figures for May for any further evidence that one of the supports for economic growth continues to slow. Figures yesterday showed the economy grew 0.5 percent in the first quarter, in line with expectations although slower than the fourth-quarter 2017's 0.6 percent pace.

The kiwi traded at 51.91 British pence from 51.97 pence yesterday. It rose to 93.12 Australian cents from 92.84 cents, gained to 4.4632 yuan from 4.4375 yuan and was little changed at 75.63 yen. It rose to 59.22 euro cents from 59.12 cents.