NZ dollar gains as Chinese manufacturing outlook gets rosier
By Paul McBeth
Nov. 22 (BusinessDesk) - The New Zealand dollar crept higher after figures showed China's manufacturing sector may expand in November for the first time in 13 months, stoking optimism the world's second-biggest economy is on the mend after a third-quarter stutter.
The kiwi rose to 81.54 US cents at 5pm in Wellington from 81.30 cents at 8am today and 5pm yesterday. The trade-weighted index advanced to 73.29 from 73.19.
China's economy may be turning the corner after a seven-quarter slowdown after the HSBC purchasing managers' index indicated industrial production is growing this month, with a preliminary reading of 50.4. Stocks across Asia rallied, with Japan's Nikkei 225 index up 1.1 percent in afternoon trading and Hong Kong's Hang Seng index gaining 0.7 percent.
"The Chinese data was slightly better than expected, though the kiwi's struggling to top 82 US cents," said Tim Kelleher, head of institutional FX sales NZ at ASB Institutional in Auckland. "It's hard to see the kiwi break out of the range with Thanksgiving tomorrow and Japan on holiday on Friday."
New Zealand's currency may trade between 81 US cents and 82 cents for the rest of the week, Kelleher said.
The kiwi extended its rally against the yen, trading at 67.21 yen at 5pm from 66.50 yen yesterday after weaker Japanese trade figures sapped investors' appetite for the so-called safe haven currency ahead of next month's election which may install a more activist government.
New Zealand's currency fell to 63.48 euro cents from 63.75 cents yesterday after European finance ministers yesterday failed to reach accord on granting Greece its next bail-out tranche. The finance chiefs will start again on Monday.
The kiwi was little changed at 78.45 Australian cents from 78.48 cents yesterday, and traded at 51.09 British pence from 51.06 pence.