Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


NZ dollar weakens ahead of Chinese data which may be weaker

NZ dollar weakens ahead of Chinese data which may show slowing economic growth

By Tina Morrison

April 16 (BusinessDesk) – The New Zealand dollar weakened ahead of the release of Chinese data today which is expected to show a slowdown in Asia’s largest economy, the country’s largest trading partner. Locally, figures are expected to show inflation is accelerating.

The kiwi softened to 86.39 US cents at 8am in Wellington from 86.50 cents at 5pm yesterday. The trade-weighted index edged lower to 80.22 from 80.27 yesterday.

Investors were nonplussed by the two main events overnight, a speech by the new Federal Reserve Chair Janet Yellen which elicited no new information, and a forecast decline in global dairy prices. Today, the focus is on a slew of data releases from China with some investors anticipating Chinese gross domestic product to soften more than economists expect.

“The potential big events turned out to be neutral and that’s why nothing really moved significantly last night,” said Imre Speizer, senior market strategist at Westpac Banking Corp. in New Zealand. “The market is looking ahead to today’s Chinese data. That’s going to be the big event of today. It’s rumoured to be weaker than the consensus estimate.”

Economists expect the Chinese economy expanded at a 7.3 percent annual pace in the first quarter, the slowest pace in five years and down from a previous rate of 7.7 percent. China also publishes March data on retail sales, industrial production and fixed asset investment, all scheduled for release at 2pm New Zealand time.

“G10 FX will be at the mercy of Chinese data, particularly over the next 24 hours,” Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, said in a note. “The pace of Chinese growth will not only affect commodity currencies but could also have a significant impact on overall risk appetite and in turn other major currencies such as the dollar, euro and British pound.”

The prospect of slower Chinese growth also weighed on the Australian dollar overnight. China is Australia’s largest trading partner and the Aussie is considered a proxy for the Chinese currency.

The New Zealand dollar gained to 92.31 Australian cents from 92.10 cents yesterday.

In New Zealand today, the focus is on first quarter inflation figures scheduled for release at 10:45am. Economists are expecting a 0.5 percent rise in the quarter and it would take a surprise of 20 basis points to impact the currency, said Westpac’s Speizer.

The kiwi slipped to 51.66 British pence from 51.74 pence yesterday, dropped to 62.55 euro cents from 62.60 cents and weakened to 87.98 yen from 88.15 yen.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Finance: Major Campaign To End "Gross Overtaxation Of Savings"

The campaign – which includes a special web site through which New Zealanders can e-mail their own and other MPs and party leaders – is backed by Age Concern, Consumer NZ, the Financial Services Council and the Taxpayers’ Union. More>>

ALSO:

Scoop Business: Leighton-Led WGP To Build, Manage Transmission Gully

The Wellington Gateway Partnership, led by a unit of ASX-listed Leighton Holdings, has won the $1 billion contract to build the Transmission Gully road north of Wellington. More>>

ALSO:

Gareth Morgan: The Government’s Fresh Water Policy – Revisited

Fresh water quality is the latest area to be in the sights of Gareth Morgan and his research organisation The Morgan Foundation... They found that the fresh water policy was a bit murkier than the Environment Minister let on. More>>

ALSO:

Interest Rates: RBNZ Hikes OCR To 3.5%, ‘Period Of Assessment’ Now Needed

Reserve Bank governor Graeme Wheeler raised the official cash rate as expected, while signalling a pause in rate hikes to assess the impact of moves so far this year. The kiwi dollar sank after Wheeler said its strength was “unjustified” and that the currency could have “a significant fall.” More>>

ALSO:

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news