WELLINGTON, March 18 (Reuters) - The New Zealand dollar opened sharply higher on Friday, buoyed both by stronger-than-expected domestic growth and by the global impact of the dovish U.S. Federal Reserve.
The New Zealand dollar NZD=D4 was trading at 0.6855 early in New Zealand, up around 1.9 percent.
"The U.S. dollar's fall post-FOMC, plus NZ GDP surprise, have flipped momentum from negative to positive. The immediate upside target is 0.6885, then 0.6900," said Westpac Bank Senior Strategist Imre Speizer.
New Zealand's gross domestic product rose a seasonally adjusted 0.9 percent in the fourth quarter versus the prior quarter and 2.3 percent on the year, data showed on Thursday. Financial Private Client Manager Stuart Ive also said resistance at 0.6900 "has come into focus" as most central banks remain cautious, with little chance of interest rate hikes in the near future.
"This places New Zealand's 2.25 percent yield high on money managers' radar," said Ive.
The Australian dollar AUD=D4 is also strengthening after the Fed's announcement. Trading up 1.3 percent at 0.7650, the Aussie is "now well on its way toward 0.7800 as copper prices surged after the Fed announcement and even iron ore rose off weekly lows," said Ive.
Traders see more upside to come. "The wash-out from the surprise Fed move is likely to continue over coming days as currency projections with respect to the big dollar are reassessed," said BNZ Currency Strategist Jason Wong.