WELLINGTON, New Zealand--The New Zealand dollar is trading higher late Wednesday after investors switched to the Kiwi after the Australian dollar came under pressure following the release of China growth data.
Data earlier in the day showed China's economy grew at its slowest pace since 2009 in the first quarter, pointing to a further loss of momentum for the world's second-largest economy. The 7% first-quarter on-year growth rate marks a slowdown from 7.3% in the fourth quarter.
This puts more pressure on economic planners to ease fiscal and monetary policy, even as they try to avoid excessive stimulus that could boost debt and fuel more excess capacity in real estate and heavy industry.
However, Annette Beacher, head of Asia Pacific Research at TD Securities, said "the fact that China is slowing should be well baked into expectations."
However, the data pushed the Australian dollar lower against the U.S. dollar particularly as the market responded to signs of growing weakness in industrial production in China. Australia is more exposed to China's economy due to the size of its commodity exports particularly as demand for these is cyclical.
In late Wellington trading, the New Zealand dollar was at US$0.7523 versus US$0.7466 late Tuesday and at A$0.9908 versus A$0.9825.
Locally, focus will now turn to the GlobalDairyTrade auction due late in the global day as investors look for information about the outlook for dairy pricing, which is New Zealand's largest export.
Write to Lucy Craymer at lucy.craymer@wsj.com, @lucy_craymer
(END) Dow Jones Newswires
April 15, 2015 02:03 ET (06:03 GMT)
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