Accelerating Economic Growth Does Not Help Kiwi

New Zealand gross domestic product expanded last quarter more than was predicted by analysts. Surprisingly enough, the New Zealand dollar demonstrated weakness after the news not only against the very strong US dollar, but also versus its Australian counterpart.
New Zealand GDP rose 1.4 percent in the third quarter of 2013, exceeding expectations of a 1.1 percent increase and 0.3 percent growth in the second quarter. It is not surprising to see the kiwi’s weakness versus the greenback after yesterday’s stimulus tapering announcement. The drop against the Aussie is much harder to explain, especially considering that prospects for an interest rate hike make the New Zealand currency more attractive to carry traders than the Australian one.
NZD/USD plunged from 0.8234 to 0.8163 as of 16:18 GMT today. AUD/NZD went up from 1.0747 to 1.0831.

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