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Kiwi gets lift from Chinese March PMI data

Monday 1st April 2019

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The New Zealand dollar was back above 68 cents early Monday after Chinese March official manufacturing data was better than expected.

The kiwi was trading at 68.29 at 8am versus 68.02 US cents late Friday in New York. The trade-weighted index was at 74.07 points from 73.83. 

Chinese March official manufacturing PMI was 50.5 in March versus an expected 49.7. 

"Chinese data was slightly better," said Tim Kelleher, head of institutional foreign exchange sales at ASB Bank. "There is just a bit of early Asian buying going on." 

Kelleher said the main focus for global markets, however, is Brexit after UK Prime Minister Theresa May's departure plan was rejected a third time. MPs last week rejected the European Union's withdrawal agreement by 58 votes..

According to ANZ FX/rates strategist Sandeep Parekh, the uncertainty created by the ongoing stalemate in the House of Commons has raised concerns that the UK is set to crash out of the EU on 12 April.

"European Council President Donald Tusk called an emergency EU summit to be held on April 10 following the defeated vote, but all eyes will be on May as UK looks for a way forward." 

The kiwi was trading at 52.37 British Pence from 52.17 pence late Friday.

It was at 95.90 Australian cents from 95.49 and Parekh said this week's Reserve Bank of Australian cash rate decision will provide "meaningful direction" for the Aussie. Today's NAB business confidence data will also be closely watched. 

The kiwi was at 60.78 euro cents from 60.57, at 75.79 Japanese yen from 75.31 and at 4.5837 Chinese yuan from 4.5609. 

"With little domestic data out this week, expect the kiwi will largely be driven by offshore moves and risk sentiment," said Parekh. 


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