NZ dollar gains as Chinese trade data beats estimates
NZ dollar gains as Chinese trade data beats estimates, Yellen fails to scare markets
By Jonathan Underhill
Feb. 12 (BusinessDesk) - The New Zealand dollar rose along with its Australian counterpart after trade figures from China beat estimates, stoking optimism that demand in the two nations’ biggest market isn’t wavering.
The kiwi rose to 83.50 US cents from 83.28 US cents at the start of the day and from 83.00 cents yesterday. The trade-weighted index rose to 78.51 from 78.41 at 8am and 78.08 yesterday.
China’s exports rose 10.6 percent in January from a year earlier while imports rose 10 percent, for a trade surplus of US$31.9 billion, the biggest for that month since 2009. China, the world’s second-largest economy, is the biggest buyer of New Zealand’s dairy products and wood and the largest market for Australia’s mineral resources.
“More of our milk powder and other things are going to China and better trading there is better for us,” said Imre Speizer, senior market strategist at Westpac Banking Corp. “It’s good for the currency.”
The kiwi dollar gained early in the day and stocks rose on Wall Street after new Federal Reserve chair Janet Yellen signalled no change to the Fed's policy path in her testimony to Congress. The fed’s massive stimulus programme would be wound back in “measured steps”, she said. The recovery in the US jobs market was “far from complete.”
“She sprung no real surprises,” Imre said. “She’s an extension of what we’ve had over the last few years with Bernanke. Equity markets probably rallied more on her consistency than anything else.”
The currency didn’t move much after New Zealand figures showed kiwis spent less on their credit and debit cards in January, snapping three months of gains, with apparel showing the sharpest decline.
The New Zealand dollar was little changed at 92.13 Australian cents from 92.09 cents yesterday. It traded at 50.71 British pence from 50.54 pence yesterday and rose to 61.20 euro cents from 60.73 cents. The kiwi climbed to 85.50 yen from 84.78 yen.