“New Zealand’s dollar rose against all of its major peers after data showed the nation’s economy grew at the fastest pace in three years last quarter.
The nation’s bonds fell for the first time in seven days on figures showing gross domestic product rose 1.5 percent from the previous three-month period, exceeding the 0.9 percent median estimate in a Bloomberg News poll. Demand for the so- called kiwi and Aussie dollars was supported after Chinese manufacturing accelerated. Australian Prime Minister Julia Gillardretained leadership of the governing Labor party after an uncontested ballot today.
“It looks like buoyant economic activity in New Zealand will be sustained,” said Mike Jones, a currency strategist at Bank of New Zealand in Wellington. “That’s swayed some doubts about the New Zealand economy and seen the New Zealand dollar enjoy a pretty strong bounce.”
The kiwi rose 0.4 percent to 82.62 U.S. cents at 5:09 p.m. in Sydney. The currency advanced 0.2 percent to 79.14 yen. The Australian dollar traded at $1.0376 from $1.0379 yesterday. It fell 0.3 percent to 99.39 yen from yesterday, when it rose 1 percent.
New Zealand’s GDP growth was almost twice as strong as the Reserve Bank’s 0.8 percent forecast. The nation’s 10-year bond yield climbed five basis points to 3.73 percent The two-year swap rate, a fixed payment made to receive a floating rate, rose five basis points to 2.94 percent. A basis point is 0.01 percentage point.
“The Reserve Bank may have to rethink their expectation that they can hold off on rate hikes until next year,” Bank of New Zealand’s Jones said….”
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