NZ dollar falls after trade figures meet expectations, US data looms
By Paul McBeth
April 29 (BusinessDesk) - The New Zealand dollar fell as upbeat local trade figures met analysts’ expectations and ahead of a US consumer confidence survey in the run-up to this week’s Federal Reserve policy review.
The kiwi traded at 85.25 US cents at 5pm in Wellington from 85.28 cents at 8am, down from 85.75 cents yesterday. The trade-weighted index declined to 79.33 from 79.78 yesterday.
New Zealand’s annual trade surplus widened to $805 million as Chinese demand for dairy products helped drive a record $50.06 billion of exports in the 12-month period. That helped support the kiwi dollar ahead of US consumer confidence, which is expected to show improving sentiment in the world’s biggest economy ahead of the Federal Open Market Committee’s policy announcement on Wednesday in Washington.
“The trade balance was pretty much as expected,” said Nick Tvedt, senior corporate FX dealer at HiFX in Auckland. “85.20 (US cents) has decent support (for the kiwi) for the time being – it may have done enough to attract some buyers out of the woodwork.”
Reserve Bank of New Zealand figures showed its high loan-to-value ratio restrictions on mortgages helped slow new low-deposit lending and has reduced house price inflation.
Traders largely ignored an Opposition Labour Party policy announcement planning to overhaul the Reserve Bank Act if it wins this year’s general election. The party would task the bank to add the nation’s external balance to its mandate, while providing a new lever to tweak compulsory savings contributions rather than wholesale interest rates as a policy response.
The kiwi fell to 61.48 euro cents at 5pm in Wellington from 62.03 cents yesterday ahead of the release of European inflation figures.
The local currency fell to 87.36 yen from 87.60 yen yesterday with Japanese banks closed today in observance of Showa Day.
The kiwi fell to 92.18 Australian cents from 92.36 cents yesterday, and dropped to 50.69 British pence from 51.07 pence.