NZ dollar little changed, may fall on drop in Chinese imports
By Tina Morrison
June 9 (BusinessDesk) - The New Zealand dollar was little changed this morning on low liquidity as Australian markets are closed for a public holiday. The currency may decline later in the day following a report that Chinese imports unexpectedly dropped in May.
The kiwi was trading at 84.89 US cents at 8am in Wellington from 85.01 cents at the New York close and 84.86 cents in Wellington on Friday. The trade-weighted index was little changed at 79.18 from 79.11 on Friday.
A customs report at the weekend showed that while Chinese exports rose a more-than-expected 7 percent in May from the year earlier, imports unexpectedly slumped 1.6 percent. The drop wasn't forecast by any of the 42 economists in a Bloomberg News survey that had a median projection for a 6 percent gain. China is the largest trading partner for New Zealand and Australia and the drop may weigh on the Australasian currencies.
"They are not importing as much, so it can be taken as a negative for the kiwi and the Aussie," said Martin Rudings, senior adviser at OMF. "Although the market is not racing out and selling at these levels, I think we will slowly drift down."
Rudings said the kiwi faced resistance around the 85-85.20 US cent level.
Underpinning the US dollar, a report on Friday showed US employers added 217,000 non-farm payrolls in May, close to expectations and reinforcing the economy is back on track following weather related weakness earlier in the year.
"I am looking for a stronger US dollar going forward and a weaker local currency," said OMF's Rudings. "These are good levels to sell."
Today, data will be released on New Zealand's first quarter wholesale trade.
The New Zealand dollar was little changed at 90.90 Australian cents from 90.95 cents on Friday. Australian banks are closed for the Queens Birthday public holiday.
The local currency was little changed at 62.21 euro cents from 62.14 cents on Friday and at 50.49 British pence from 50.48 pence. The kiwi edged up 86.97 yen from 86.83 yen on Friday ahead of Japanese reports on balance of payments, consumer confidence and the final reading of first quarter GDP.