Thursday 23rd January 2014
|Text too small?|
The New Zealand dollar fell as weaker than expected Chinese manufacturing data raised concerns about the world's second biggest economy, and amid speculation the US Federal Reserve will further reduce its stimulus when it reviews policy next week.
The kiwi fell to 82.74 US cents at 5pm in Wellington from 83.06 cents at 8am and 83.22 cents yesterday. The trade-weighted index declined to 78.61 from 78.86 yesterday.
Chinese manufacturing activity shrank this month, according to the preliminary reading of the Markit/HSBC Purchasing Managers' Index, raising fears about the strength of the nation's economy and weighing on the prospects for New Zealand and Australian trade.
The Chinese data added to weakness in the kiwi dollar after a report by Wall Street Journal Fed watcher Jon Hilsenrath predicted the US central bank would trim another US$10 billion from its monthly asset purchases to US$65 billion at next week's policy meeting.
"The Chinese manufacturing PMI flash from HSBC was a lot worse than expected," said Stuart Ive, senior client adviser at OMF in Wellington. The kiwi may trade between 82.50 US cents and 83.20 cents in the near-term, and will be "very data dependent" with European and US manufacturing figures due, he said.
The kiwi rose to 94.03 Australian cents from 93.81 cents yesterday with the Chinese data weighing more heavily on Australia's currency, as China is that country's largest export market. New Zealand's dollar lost ground on the cross-rate yesterday when December inflation data was more than expected.
New Zealand manufacturing and consumer confidence surveys today continued to show the local economy is gathering momentum.
Traders are waiting for New Zealand's Reserve Bank to review monetary policy next week. They continue to price in a 46 percent chance governor Graeme Wheeler will lift the official cash rate from its record-low 2.5 percent. Wheeler is scheduled to speak to the Canterbury Employers' Chamber of Commerce the following day on Jan. 31.
The local currency dropped to 61.06 euro cents from 61.31 cents yesterday, and sank to 49.93 British pence from 50.49 pence. It decreased to 86.37 yen at 5pm in Wellington from 86.54 yen yesterday.
No comments yet
China’s Assertiveness Is Becoming a Problem for Its Friends, Too
New Talisman - Chairman’s Address to AGM 2020 August 6, 2020
T&G reports its 2020 Interim Results
Gold price hits $2,000 for first time on Covid
TruScreen strengthens its market presence in central and eastern Europe
Refining NZ announces non-cash impairment
Ryman Healthcare COVID-19 update Victoria
Talisman Quarterly Activities Report to 30 June 2020
General Capital gives notice of Annual Meeting
Scales Corporation - Business Update