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NZ Dollar Extends Gain After Strong China Data

The New Zealand dollar advanced against its major opponents in the European session on Monday, extending its previous session's gains, as encouraging economic data from China allayed some of the fears about slowing global growth.

China's retail sales and industrial production beat forecasts in June, while annual GDP growth was in line with expectations in the second quarter, official data showed.

Annual growth in industrial production advanced more-than-expected to 6.3 percent from 5 percent in May, showing the fastest growth in three months.

Likewise, retail sales grew at a faster pace of 9.8 percent after rising 8.6 percent a month ago. Economists had forecast an 8.5 percent increase for June.

Gross domestic product expanded 6.2 percent year-on-year in the second quarter, matching forecasts. Nonetheless, this was slower than the 6.4 percent growth registered a quarter ago.

The data suggested signs of stabilization in the economy driven by stimulus from Beijing.

The latest survey from BusinessNZ showed that New Zealand services sector continued to expand in June, albeit at a slower pace, with a Performance of Services Index score of 52.7.

That's down from 53.5 in May, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

The kiwi appreciated to a 4-day high of 1.0446 against the aussie, from a 5-day low of 1.0493 touched at 5:30 pm ET. The next possible resistance for the kiwi is seen around the 1.025 mark.

The kiwi rallied to 0.6735 against the greenback for the first time since April 18. On the upside, 0.69 is possibly seen as the next resistance for the kiwi.

The kiwi that closed Friday's trading at 72.19 against the yen climbed to a 2-week high of 72.65. If the kiwi extends rise, 74.00 is possibly seen as its next resistance level.

The NZ currency spiked higher to a 2-1/2-month high of 1.6748 against the euro from last week's closing value of 1.6829. The kiwi is seen finding resistance around the 1.64 region.

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