NZ dollar rises from three-week low after Chinese data
NZ dollar rises from three-week low after better-than-expected Chinese manufacturing data
By Paul McBeth
May. 22 (BusinessDesk) - The New Zealand dollar rose from a three-week low as better-than-expected Chinese manufacturing data lifted investors' confidence in the Australasian nations, which count the world's second-biggest economy as their biggest export market.
The kiwi rose to,85.80 US cents at 5pm in Wellington from 85.61 cents at 8am, and 85.55 cents yesterday. The trade-weighted index advanced to 79.99 from 79.71 yesterday.
The kiwi and the Australian dollar gained after the preliminary HSBC manufacturing purchasing managers' index, a gauge of Chinese manufacturing,,rose to 49.7, a five-month high. While the indicator shows the sector is still contracting, it was ahead of analysts' expectations for a print of 48.3, raising confidence the Chinese economy may avoid a sharper slowdown than initially feared.
Investors' appetite for riskier assets got a boost from minutes to the latest Federal Reserve policy meeting which said the US central bank didn't see inflation pressures which could warrant higher interest rates.
"China has obviously been a big concern for the market of late, and we saw quite decent improvement," said Sam Tuck, senior FX strategist at ANZ Bank New Zealand in Auckland. "Any good news in China is good news for us."
The kiwi will attract buyers between 85 US cents and 85.50 cents, ANZ's Tuck said. Traders will be watching manufacturing figures in the US and Europe to gauge output in those economies.
New Zealand business managers' expectations for inflation edged up a little in the Reserve Bank's survey, with firms seeing consumer prices rising 2.08 percent over the coming year and 2.36 percent in the next two, up from 2.03 percent and 2.33 percent respectively.
The kiwi was little changed at 50.80 British pence from 50.79 pence yesterday, after the pound rose to a five-and-a-half year high yesterday,when,government figures showed strong UK retail sales. The kiwi rose to 62.75 euro cents from 62.41 cents yesterday.
The local currency slipped to 92.51 Australian cents at 5pm in Wellington from 92.61 cents yesterday, and climbed to 87.28 yen from 86.53 yen.