Investing.com

Investing.com - The New Zealand dollar weakened in early Asia trade on Thursday after fourth quarter gross domestic product growth met expectations.

NZD/USD traded at $0.8529, down 0.33%. after data showed quarter-on-quarter growth of 0.9%, matching expectations, but slightly above the Reserve Bank of New Zealand''s forecast of 0.8% growth. The RBNZ is expected to raise its official cash rate again this year from 2.75% now. It hiked by 25 basis points earlier this month in the face of rapid growth and worries over house price inflation.

Elsewhere in Asia USD/JPY traded at 102.42, up 0.08%, ahead of a light data day with Bank of Japan Governor Haruhiko Kuroda slated to give a speech at 1615 local time (0715 GMT).

Overnight, the dollar shot up against most major currencies after the Federal Reserve cut its monthly bond-buying program to $55 billion from $65 billion, while comments from Janet Yellen suggesting a possible timetable as to when rates may rise spooked markets and sent investors chasing safe-haven greenback positions.

The Fed earlier said it was leaving interest rates unchanged and reduced the amount of bonds it buys in the open market each month to $55 billion from $65 billion, both moves in line with expectations.

The news sent the greenback rising, as the Fed''s asset-purchasing program, which kicked off in 2012 at $85 billion a month, has suppressed long-term interest rates for over a year, sending investors to assets like stocks with the hope investing and hiring ensues.

Elsewhere, the Fed omitted previous language calling for rate hikes if the unemployment rate approaches a 6.5% threshold, a policy tool known as forward guidance.

Even though the economy is improving, a highly accommodative monetary policy stance remains appropriate, the U.S. central bank said.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.02% at 80.12.

On Thursday, the U.S. is to publish the weekly report on initial jobless claims, as well as data on existing home sales and manufacturing activity in the Philadelphia region.



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