24 Mar 2009

Dollar ends day unchanged

9:38 pm on 24 March 2009

The New Zealand dollar ended the trading day here roughly unchanged against the Greenback after sizable gains overnight.

The dollar reached a 10-week high, buying about US57 cents by late trade in New Zealand on Tuesday, after trading as high as 57.6c overnight.

The New Zealand dollar eased in anticipation of weak local economic data this week.

Fourth quarter gross domestic product data on Friday is expected to confirm that the recession lasted all of 2008.

An expected increase in the balance of payments deficit on Thursday is also weighing on the dollar.

However, the Kiwi has gained 16% against the US dollar in the past two weeks.

Westpac markets economist Michael Gordon says the New Zealand dollar's rise over the past week is based on false optimism.

He says US banks may have reported operating profits recently, but have struggled in accounting for their big credit write-downs.

BNZ currency strategist Danica Hampton says more bad economic news is inevitable before a full recovery takes hold in the US.

She says when this happens it will weigh down the US dollar against a range of currencies including the New Zealand dollar.