The New Zealand dollar declined during the early Asian trading session on Wednesday, mirroring its Australian counterpart which was dragged lower by the weak Australian gross domestic product (GDP) growth in the third quarter.
The New Zealand kiwi edged 0.61% lower at $0.8191 against the greenback at the time of writing, while the Australian dollar dropped 0.84% against the US dollar to $0.9059 at the same time.
The Australian dollar dropped to its lowest level since October 2008 against the kiwi, trading at $1.104 per New Zealand dollar. Building activity increased 1.4% on a quarter-to-quarter basis due to a strong rise of 8.1% in residential building activity, the Statistics New Zealand data confirmed.
Statistics New Zealand also stated that the trend for all building increased in the third quarter; however the growth rate was seen to be at a slow pace.
Australian GDP
Australia’s economy grew at a steady pace but remained at a slow rate in the last quarter as the fall in the private sector investment offset higher exports and consumption.
Australia’s gross domestic product (GDP) advanced 0.6% higher in the three months to September, reports from the Australian Bureau of Statistics confirmed, dropped from the revised second quarter growth of 0.7% and below a forecast of 0.7%.
RBA
The Governor of the Reserve Bank of Australia, Glenn Stevens maintained the bank’s 2.5% interest rate, according to an official statement released on Tuesday.
According to the statement the private demand out of the mining sector was at a positive condition, but there was still a considerable uncertainty with the outlook.
“The easing in monetary policy that has already occurred since late 2011 has supported interest-sensitive spending and asset values,” Stevens said “The full effects of these decisions are still coming through, and will be for a while yet,” he added.
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