NZ dollar falls as Chinese imports drop, payrolls loom
NZ dollar falls as Chinese imports drop in holiday shortened February, US jobs data looms
By Paul McBeth
March 8 (BusinessDesk) - The New Zealand dollar fell in local trading today after weaker than expected Chinese import figures emerged in a month that was shortened by the Lunar New Year, and as US employment data looms.
The kiwi fell to 82.55 US cents at 5pm in Wellington from 82.75 cents at 8am and 82.76 cents yesterday. The trade-weighted index fell to 75.97 from 76.13 yesterday.
Chinese imports fell 15.2 percent in February from a year earlier, according to government figures, sapping demand for the trans-Tasman currencies, with both Australia and New Zealand heavily reliant on exports to China. A Bloomberg survey of economists was picking an 8.5 percent decline in Chinese imports. The figures don't accommodate a reduction in the number of working days due to the timing of China's Lunar New Year holidays.
That comes ahead US non-farm payrolls which is expected to show the world's biggest economy added 165,000 jobs last month. The Federal Reserve has put a bigger emphasis on employment, linking the quantitative easing exit to achieving a 6.5 percent jobless rate.
"If volatility stays low, the US dollar seems to go up or down with its own good data," said Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney. The US jobs number "could be decent" which would lift the greenback, he said.
The kiwi dollar is heading for a 0.1 percent gain against the greenback and on a trade-weighted basis this week.
New Zealand's Reserve Bank will review monetary policy next week and is expected to keep the official cash rate at 2.5 percent. The central bank has been concerned about New Zealand's bubbling housing market, and official figures today showed property values continued to climb in February, with a lack of supply in Auckland and the slow Christchurch rebuild supporting gains.
The kiwi fell to 63.03 euro cents from 63.70 cents yesterday after European Central Bank president Mario Draghi was less gloomy about the region and downplayed Italy's political stalemate. It declined to 55.01 British pence from 55.17 pence yesterday with the Bank of England hold fire on expanding its asset purchase programme.
The local currency was little changed at 78.71 yen from 77.67 yen yesterday, and fell to 80.56 Australian cents from 80.77 cents.