Kiwi rebounds against softer greenback

The New Zealand dollar's dip below US70c on weaker than expected gross domestic product data was short-lived as it gained overnight against a softer US dollar and other major currencies.

The 0.2 percent rise in gross domestic product (GDP) in the September quarter was less than the 0.3 percent rise the market was expecting and the kiwi fell to US69.72c, its lowest level since early September.

But it crept up to US69.92c at 5pm yesterday and by 8am today it was at US70.55c.

The kiwi also firmed to A80.09c at 8am from A79.82c at 5pm, 0.4916 euro from 0.4908, and 64.61 yen from 64.12. The trade weighted index was at 64.62 from 64.32.

The Associated Press reported from New York that the US dollar dropped against the euro and yen as new data on home sales and consumer spending reinforced that the US economy's recovery will be bumpy and slow. 

The US government said personal incomes and spending both rose in November, but economists cautioned that the gains weren't enough to help output grow strongly.

The data put a damper on the generally improving picture of the US economy from retail sales and unemployment numbers earlier this month, AP reported. The improved outlook has caused the dollar to gain in tandem with stocks in December, breaking its regular trading pattern of more than a year.

Since Lehman Brothers collapsed, the US dollar had tended to benefit as a ``safe haven'' buy, as investors took their money out of emerging markets and stocks and instead bought up the US dollar and Treasurys.

- NZPA