June 1 (Bloomberg) -- Australia’s dollar rose toward a three-week high, snapping a two-day loss, after a government report showed the nation’s economy contracted less in the first quarter than some analysts forecast.
The Aussie gained against 12 of its major counterparts after the report showed first-quarter gross domestic product shrank 1.2 percent from the previous three months, compared with the median estimate for a 1.1 percent drop of economists surveyed by Bloomberg News. The New Zealand dollar fell as a technical indicator signaled its recent rally to a record high was overdone.
“The market did see a worse result, and the Aussie dollar has underperformed other commodity currencies leading into the data,” said Greg Gibbs, a currency strategist at Royal Bank of Scotland Group Plc in Sydney. “So this may deviate some of the underperformance and catch up a little.”
Australia’s dollar rose 0.2 percent to $1.070 as of 12:49 p.m. in New York from $1.0672 yesterday, when it reached $1.0758, the highest since May 11. The currency fell 0.6 percent to 86.51 yen.
New Zealand’s dollar fell 0.2 percent to 82.24 U.S. cents from 82.39 cents yesterday, when it reached 82.64, the strongest since the currency was freely floated in 1985. It weakened 0.9 percent to 66.53 yen.
Australia’s GDP fell 1.2 percent from the fourth quarter, when it rose a revised 0.8 percent, the Bureau of Statistics report released in Sydney today showed. That was stronger than a 2 percent contraction forecast by David Colosimo, a Melbourne- based economist at Goldman Sachs Group Inc.
The Aussie also gained after data showed China’s manufacturing expanded in May at a faster pace than economists forecast. The Asian nation is Australia’s largest trading partner.
The New Zealand dollar’s 14-day relative strength index versus the greenback was at 66.1, approaching the 70 threshold that some traders see as a sign an asset’s price has risen too far and is poised to drop.
--With assistance from Cecile Vannucci in New York. Editors: Paul Cox, Greg Storey
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