Wednesday 14th March 2018
|Text too small?|
The New Zealand dollar got a lift from data indicating the Chinese economy - the country's main trading partner - remains on a strong footing but jitters about a global trade war may knock the kiwi off its perch.
The kiwi dollar traded at 73.39 as at 5pm in Wellington versus 73.22 US cents as at 8am in Wellington and 73.12 cents late yesterday. The trade-weighted index was at 75.07 from 74.92 yesterday.
Chinese industrial production, fixed-asset investment and retail sales all came in higher than market expectations, according to Dow Jones Newswires. Value-added industrial output, for example, expanded 7.2 percent in January and February from a year earlier, compared with a 6.2 percent on-year increase in December. Markets had been expecting a 6.1 percent lift. China provides combined data for January and February to limit distortions caused by the Lunar New Year holiday.
"Today’s data are broadly upbeat and suggest that the Chinese economy had a strong start to the year," said Capital Economics in a note.
Martin Rudings, senior dealer at OMF, also said the data was "quite strong" and likely gave the kiwi a lift. He said, however, the New Zealand dollar may not stay strong for long, in particular after news that US President Donald Trump is also looking to impose tariffs on up to $60 billion of Chinese imports, targeted at information technology, consumer electronics and telecom.
"I think there is a risk-off trade building" given the possibility of a global trade war, he said. "I think there is a background risk there, that markets are trying to brush off," he said.
Looking ahead, Rudings said markets will be watching for tomorrow's fourth-quarter gross domestic product data, with economists expecting a 0.8 percent quarter-on-quarter expansion, according to Bloomberg. Any upside surprise will benefit the kiwi.
The kiwi rose to 78.11 yen from 77.91 yen yesterday and gained to 93.19 Australian cents from 92.85 cents. It fell to 59.16 euro cents from 59.30 cents and dropped to 52.48 British pence from 52.60 pence. The kiwi traded at 4.6342 yuan from 4.6244 yuan.
New Zealand's two-year swap rate fell 2 basis point to 2.24 percent and the 10-year swap rate fell 4 basis points to 3.21 percent.
No comments yet
NZ dollar trades near 2019 low on Aussie rate outlook, China worries
Short window left to lock in good interest rates on term deposits
MediaWorks breakeven stymied by radio
Loan-to-value restrictions effective but have some drawbacks - RBNZ
Yili deal a timely cash injection for Westland farmers - ANZ
AFT interested in medicinal cannabis but says it's not commercially viable yet
Serko chalks up another year of 28% sales growth, profit dips on acquisition adjustment
NZ first-quarter retail sales grow 0.7%, slightly better than expected
SkyCity poised to enter online gaming space
AFT narrows net loss, turns cash flow positive