The New Zealand dollar gained against the greenback after China's economic growth exceeded analysts' expectations, stoking demand for higher-yielding currencies, while weak New Zealand business confidence matched market expectations.
The New Zealand dollar traded at 79.84 US cents at 5pm, up from 79.45 cents at 8am. The trade-weighted index rose to 71.28 from 71.16.
China, New Zealand's second largest export destination, reported gross domestic product rose 8.9 per cent in the fourth quarter from a year earlier, according to the statistics bureau in Beijing.
This was above the 8.7 per cent median forecast in Bloomberg survey of 26 economists. Industrial production in December also increased 12.8 per cent on the same period last year.
"Today's little pop up (of Chinese data) is getting people excited," said Alex Hill, manager of Corporate FX at HiFX.
"It is slightly better than expected - but it is still fairly illiquid trading with the US holiday still in effect."
In New Zealand, local trading activity slowed and business confidence dimmed in the December quarter as the flurry of work after the Christchurch earthquakes returns to normal levels.
The New Zealand Institute of Economic Research survey, released on Tuesday morning, showed firm's own activity slowed to a negative 4 per cent from a 1 per cent expansion in September.
"It has been difficult to drag the kiwi around off domestic data," with the survey showing again that local statistics are failing to have any "massive effect" on the New Zealand dollar, Mr Hill said.
The kiwi dollar fell to 62.67 euro cents from 62.72 and to 76.79 Australian cents from 77.02 cents. It gained to 51.97 British Pence from 51.85 pence and 61.26 yen from 60.94 yen.
