Sharechat Logo

Kiwi falls amid concerns of Chinese tightening

Friday 21st January 2011

Text too small?

The New Zealand dollar fell after data showing stellar economic growth in China in 2010 fueled speculation that Beijing may come under more pressure to tighten monetary policy.

By 8am the kiwi was at US75.68c against the US dollar from US76.34c at 5pm yesterday, having dropped to a three-week low around US75.30c during the overnight session.

The greenback gained broadly as an array of data suggested the United States economy is firmly on a path of recovery, with stronger-than-expected data on jobless claims and existing home sales providing a glimmer of hope.

ANZ bank said the NZ and Australian dollars had been hard hit as commodity prices and equities fell in tandem, with the kiwi falling faster than the aussie as risk assets underperformed.

The economic data out of the US had been encouraging, with the jobless claims data suggesting the US labour market may be starting to improve.

"Perhaps the baton of growth will pass from China to the US this year. If so, the USD cold be the standout currency this year," ANZ said.

Overnight, the US dollar had gained against all major currencies, except the Mexican peso, with the catalyst appearing to be the concerns about more policy tightening from China.

Tighter Chinese policy would mean slower economic growth, and since China had been the sole economic powerhouse holding things up last year, markets were worried about the implications for global growth and commodity demand, ANZ said.

"Hence, the hit to commodities overnight, along with the commodity currencies with the NZD being the worst performer."

The NZ dollar was little changed at A76.68c at 8am, having dropped to a one-week low around A76.50c during the session. The kiwi also fell to a one-month low around 0.5610 euro, and by 8am had recovered only slightly to 0.5621, having fallen from 0.5678 at 5pm.

The kiwi edged up to 62.87 yen at 8am from 62.72 at 5pm, while the trade weighted index fell to 67.96 from 68.37.

 

NZPA



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Contact Energy Limited (NZX: CEN) Considers Green Capital Bond Offer
Tourism Holdings Limited (NZX: THL) Sells Mighway and SHAREaCAMPER to Camplify
26th October 2021 Morning Report
Harmoney Corp Limited (NZX: HMY) Prices $105m Inaugural ABS Transaction
New Zealand Rural Land Company Limited (NZX: NZL) Agreement to acquire large scale dairy asset portfolio
EROAD Limited (NZX: ERD) launches Clarity Solo Dashcam
22nd October 2021 Morning Report
Pictor ready to roll out game-changing COVID antibody test in New Zealand
Scott Technology Limited (NZX: SCT) Announces FY21 Results
21st October 2021 Morning Report