By Swati Pandey
SYDNEY/WELLINGTON, Dec 22 (Reuters) - The New Zealand dollar broke a six-session losing streak on Thursday, stepping up after data showed the economy grew at a rapid pace in the third quarter, bolstering views the nation's central bank was done cutting interest rates.
The New Zealand dollar NZD=D4 added 0.3 percent to $0.6920 but stayed near a seven-month low of $0.6883 touched this week.
The Kiwi is set for its worst monthly performance since a 3 percent drop in May, pressured by a surge in U.S. Treasury yields and the dollar after Donald Trump's upset U.S. election win last month.
It will mark the third straight month of losses for the New Zealand currency, though for the year it is still seen scoring a small gain, after being more than 8 percent higher in early November.
Some respite for the Kiwi came from Thursday's data showing gross domestic product rose a faster than expected 1.1 percent, painting a rosy picture of the economy - one of the rich world's top growing nations. was the fifth straight quarter of growth at 0.7 percent or more for the island nation of 4.7 million and took the annual pace of expansion to a rapid 3.5 percent.
"Today's figures will cement market nuances in regard to odds of the Reserve Bank of New Zealand winding back stimulus in the back half of 2017," said Cameron Bagrie, chief economist at ANZ.
"We're not in that camp yet, but that's clearly how the bias is shifting. Strong growth + yield + political stability should help temper some expectations that the NZD is headed lower."
The dollar index has gained more than five percent since the Nov. 8 U.S. election, as traders have bet that Trump's policies will step up fiscal spending, stoke inflation and push up interest rates at a faster pace.
The Kiwi rose 0.2 percent on the yen NZDJPY= while it was flat on both the euro EURNZD= and its Australian counterpart AUDNZD=R .
The Australian dollar AUD=D4 was up 0.15 percent at $0.7250, from $0.7238 the previous day.
The Aussie has erased all of its gains this year to be down 0.5 percent so far, also hurt since Trump's election victory and after data this month showed the economy shrank for the first time since 2011, raising the spectre of a possible recession.
Traders say the near-term outlook for the Aussie appears gloomy, with the next stop seen at $0.7150. Key resistance lies at 73 U.S. cents, a breach of which could spur a small rally.
All eyes will be on key data releases from the United States later in the day, including a revised third quarter GDP reading, durable goods orders for November and weekly jobless claims.
New Zealand government bonds 0#NZTSY= were mostly unchanged.
Australian government bond futures ticked lower, with the three-year bond contract YTTc1 and the 10-year contract YTCc1 down 1 tick each at 97.90 and 97.13 respectively.
(Editing by Shri Navaratnam)