Aussie, Kiwi cut into weekly losses against greenback

South Pacific dollars were on the rise on Friday as the monetary units cut into losses earlier in the trade week after the government of China noted its economy developed during the second quarter of the year, Bloomberg reports.

But those gains slowed down as the trade session continued.

The Asian nation, as top trade partner to Australia, saw gross domestic product grow 7.6 percent during the second quarter of this year as compared to the same period last year, according to the National Bureau of Statistics.

The nation hosting the globe's second-largest economy also is the second largest destination for commerce from New Zealand.

The Australian and New Zealand dollars benefited from increased demand influenced by the uptick of Asian stocks, which achieved the gains following the announcement about Chinese GDP.

The information about the Asian nation's GDP "came out just below the market consensus, which is a positive result," strategist Jonathan Cavenagh with Westpac Banking Corporation in Singapore told Bloomberg. "The growth momentum is still slowing down, so I wouldn’t jump the gun just yet. But we can probably see more of a short squeeze in the Aussie in the near term."

Gains reduce weekly losses

The benefits to the Aussie on Friday cut the monetary unit's losses to 0.5 percent against the U.S. dollar. The New Zealand dollar's gains on Friday, which were roughly 0.3 percent, cut into the 0.8 percent losses against the U.S. dollar since July 6.

The 7.6 percent gains to the gross domestic product of the Asian nation during the second quarter were lower than the 8.1 percent gains during the same last year.

The central bank of China indicated earlier this month it was slashing interest rates for the first time in about four years as a strategy of prompting development and growth.

One strategist said the economic developments in China are sure to continue impacting the Aussie.

"We believe the second quarter to be the trough in Chinese economic activity and therefore we ultimately think the Australian dollar is likely to be in the process of finding a bottom in the not too distant future," chief rate strategist Gavin Stacey with Barclays in Suydney told Bloomberg. "We're hoping to start to see the effects of the policy initiatives to start to show up in the economic data."

Dips set in

But the Aussie dove later in the trading session, The Wall Street Journal reports.

The 7.6 percent GDP growth during the second quarter represents a reduction from the first quarter's GDP of 8.1 percent. Plus the second quarter's return represents the lowest level of that metric since early 2009.

Though the Aussie initially gained, the monetary unit did not compensate for losses it endured overnight against the world's reserve currency.

A commodity-based currency, the Aussie also suffered the consequences of Moody's Investor Service slashing the credit rating of a euro zone nation early on during the Friday trade session.

"The small boost to sentiment from the Chinese numbers hasn't been enough to overcome a risk-off week that was compounded by the [Moody's] downgrade to Italy's credit rating this morning," states a note authored by fixed-income analysts with Deutsche Bank, according to the Wall Street Journal.

Losses toward the end of the Friday trading session also propelled the Aussie toward its first week of losses against the U.S. dollar, according to The Sydney Morning Herald.

The monetary unit is projected to continue dipping next week as China continues suffering economic hitches, one strategist said.

"‘What those numbers show is that the Chinese economy is starting to slow down, and we could see the dollar fall towards parity next week," foreign exchange strategist Andrew Salter with ANZ told the Sydney Morning Herald.