Sharechat Logo

NZ dollar rises after heartening Chinese data

Monday 15th July 2019

Text too small?

The New Zealand dollar rose after a raft of Chinese economic data that mostly beat expectations.

The kiwi was trading at 67.19 US cents at 5pm in Wellington from 66.81 at 7:50am while the trade-weighted index was at 73.35 points from 73.03.

The New Zealand dollar had already been gaining from US dollar weakness amid expectation that the Federal Reserve will be cutting interest rates shortly.

Although the Chinese economy grew at its slowest pace in 27 years in the June quarter, by 6.2 percent compared with the June quarter last year, other data showed industrial production was up 6.3 percent in June, well above market expectations of 5.2 percent, and retail sales were up 9.8 percent in the month compared with market expectations of 8.5 percent.

“The New Zealand dollar benefited a little on Friday from the weak US dollar but today it was all about China,” says Peter Cavanaugh, the senior client advisor at Bancorp Treasury Services.

“China’s GDP was a disappointment but everything else was pretty solid – the weaker GDP was seen as a likely prompt for central bank stimulus in China which, of course, will benefit New Zealand and Australia,” Cavanaugh says.

China is the largest trading partner of both Antipodean countries while Australia is New Zealand’s second-largest trading partner.

The market is also preparing for New Zealand inflation data tomorrow. The market is expecting a tepid 0.6 percent quarterly increase in the Consumers’ Price Index, taking the annual growth to 1.7 percent, according to the median estimate from a poll of economists by Bloomberg.

The central bank has a dual mandate to support maximum sustainable employment and keep annual CPI inflation between 1 percent and 3 percent over the medium term, with a focus on the mid-point of 2 percent.

The New Zealand dollar was higher against other major currencies at 95.54 Australian cents versus 95.24, at 53.45 British pence from 53.11, at 59.61 euro cents from 59.24, at 72.57 yen from 72.10, and at 4.6169 Chinese yuan from 4.5942.

The New Zealand two-year swap rate edged up to 1.3582 percent from 1.3419 on Friday while the 10-year swap rate rose to 1.8600 percent from 1.8400.


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
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:

Michael Hill International Limited - Fourth Quarter Trading and Business Update
Trustpower releases quarterly operating results
Napier Port third-quarter 2020 trade volumes
Rio Tinto decision following strategic review of Tiwai
Contact says smelter closure is ‘disappointing’
South Port (SPN) Statement on NZAS Tiwai Point Aluminium Smelter Closure
Rio Tinto announcement on Tiwai Aluminium Smelter
Me Today announces equity raising to accelerate growth
Scott Technology Trading Update; Rising to the COVID Challenge
New non-binding indicative offer received from apvg, shareholder meeting deferred

IRG See IRG research reports