NZ dollar little changed after Chinese shares sink; thin data pipeline
By Paul McBeth
Feb. 24 (BusinessDesk) - The New Zealand dollar was little changed after a slump on China’s stock market weighed on Australia’s currency and ahead of a light week for economic data releases.
The kiwi traded at 82.76 US cents at 5pm in Wellington from 82.80 cents at 8am and 82.79 cents on Friday in New York. The local currency was little changed at 92.30 Australian cents from 92.20 cents on Friday in New York.
China’s Shanghai Stock Exchange Composite index was down 2 percent in afternoon trading, as speculation reduced lending will sap growth in the world’s second biggest economy. The Australian dollar dropped after the decline, and was trading at 89.62 cents at 5pm in Wellington from 89.74 cents on Friday in New York, as investors mulled the impact on a softer Chinese economy on Australia’s imports.
The Australasian countries count China as their biggest export destination, and the trans-Tasman currencies are often used as a proxy by investors to get exposure to China.
“Chinese equity markets are down and there are a few jitters going on in China,” said Imre Speizer, market strategist at Westpac Banking Corp in Auckland.
Westpac’s Speizer said with little first-tier economic data scheduled for release this week, investors will be watching the general trend of lower level figures to firm up their views on the currency. He expects the kiwi will largely trade within recent ranges this week.
“I’m sitting on the fence – there’s nothing to indicate it will break outside last week’s range,” he said.
A BusinessDesk survey of 11 currency strategists and traders predicts the local currency may trade between 81.50 US cents and 84.20 cents this week. Four expect the kiwi to decline, five expect it will remain relatively neutral, and while two anticipates a gain.
The local currency was almost unchanged at 60.24 euro cents at 5pm in Wellington from 60.25 cents on Friday in New York, and edged down to 49.73 British pence from 49.82 pence. It fell to 84.62 yen from 84.88 yen last week. The trade-weighted index was 77.76 from 77.79 on Friday.