By LUCY CRAYMER WELLINGTON—The New Zealand dollar was lower late Friday, after the Australian dollar dipped following the release of data showing China's trade surplus narrowed in February. China's trade surplus came in at $15.25 billion in February, down from $29.15 billion the month before, according to figures released Friday. The Australian dollar sank on the data as currency markets reacted by buying the US dollar. It later made up most of the losses and ended up being little changed late in local trade Friday. "The Aussie should have been hurt because China is importing less iron ore," a staple for the Australian economy, said Westpac WBC.AU -0.13% currency strategist Imre Speizer. China's imports fell a sharper-than-expected 15.2% in February from a year earlier, compared with a 28.8% rise in January. Economists had predicted a 10% decline. At 0500 GMT, the New Zealand dollar was trading at US$0.8255 versus US$0.8277 late Thursday. Against the Australian dollar, it was at A$0.8061 versus A$0.8073 late Thursday. Mr. Speizer said the New Zealand dollar was likely to take direction from the U.S. nonfarm payrolls data due out later in the global day. "That should be a good number but the market has priced much of it in already," he adds. The yield curve steepened in New Zealand government bonds following a selloff in offshore markets overnight, said a local bond trader. The yield on the April 2015 bond was up 4.5 basis points at 2.68% and the April 2023 bond rose 6.5 basis points to 3.795%. The interest rate swap curve also steepened.

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