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Forex - Kiwi gains after trade, eyes on heavy data day in Japan

Published 06/26/2014, 07:04 PM
Updated 06/26/2014, 07:08 PM
New Zealand dollar higher after trade data

Investing.com - The New Zealand dollar gained in early Asian trade on Friday after a solid surplus in trade figures, though below expectations.

New Zealand's May trade balance came in at NZ$1.37 billion, narrower than a expected year-on-year surplus of NZ$1.43 billion.

NZD/USD traded at 0.8785, up 0.07%, after the data.

At 0830 Tokyo time (2330 GMT) Japan's May CPI data, unemployment rate and household spending are all scheduled for release.

The forecast for May national core CPI (excluding perishables but including energy) is a gain of 3.4% year-on-year, which would be a 12th straight year-on-year rise and the highest since a gain of 3.5% in April 1982.

The unemployment rate is expected at 3.6%, unchanged from April. Household spending is expected to have dropped 2.0% year-on-year in real terms, the second consecutive monthly drop. At 0850 (2350 GMT) in Tokyo, Retail sales are seen down 1.8% year-on-year as the impact of an April 1 hike in the sales tax to 8% from 5% continues to bite.

USD/JPY traded at 101.67, down 0.05%, ahead of the data.

At 0900 hours in Sydney (2300 GMT) Reserve Bank of Australia Assistant Governor Christopher Kent's appears before a Parliamentary Committee Inquiry into foreign buying in Australia's residential real estate.

AUD/USD traded at 0.9416, up 0.02%.

Overnight, the dollar traded mixed to higher against most major currencies on Thursday after a widely-watched Federal Reserve official said earlier that interest rates could rise sooner rather than later, possibly in early 2015, which helped offset sluggish data.

St. Louis Federal Reserve President James Bullard told Fox Business Network earlier that an improving economy may make conditions ripe for interest rates to rise possibly in early 2015.

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The Commerce Department reported Wednesday that U.S. gross domestic product contracted at an annual rate of 2.9% in the first quarter of the year, far surpassing consensus forecasts for a decline of 1.7%, though markets quickly brushed off the dismal numbers as a weather-related disappointment.

"I think the market's right to shake this off," Bullard told the network, describing the contraction as an "aberration."

"If you throw out the first quarter and just look forward over the next four quarters, most forecasters have 3%-plus growth."

Inflation, while still low, is on the rise and approaching the Fed's 2% target.

"My forecast actually has us moving through 2% and over 2% in 2015," which bolstered the dollar despite lackluster U.S. data.

The U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending June 21 declined by 2,000 to 312,000 from the previous week’s revised total of 314,000.

Analysts had expected jobless claims to fall by 4,000 to 310,000 last week.

A separate report showed that U.S. personal spending rose 0.2% last month, below expectations for an increase of 0.4%. Personal spending for April was revised to a flat reading from a previously reported decline of 0.1%.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was flat at 80.28.

On Friday, the U.S. is to round up the week with revised data on consumer sentiment.

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