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

 

NZ dollar gets lift from China data but may be short-lived

NZ dollar gets lift from China data but may be short-lived as global trade war fears remain
By Rebecca Howard

March 14 (BusinessDesk) - The New Zealand dollar got a lift from data indicating the Chinese economy - the country's main trading partner - remains on a strong footing but jitters about a global trade war may knock the kiwi off its perch.

The kiwi dollar traded at 73.39 as at 5pm in Wellington versus 73.22 US cents as at 8am in Wellington and 73.12 cents late yesterday. The trade-weighted index was at 75.07 from 74.92 yesterday.

Chinese industrial production, fixed-asset investment and retail sales all came in higher than market expectations, according to Dow Jones Newswires. Value-added industrial output, for example, expanded 7.2 percent in January and February from a year earlier, compared with a 6.2 percent on-year increase in December. Markets had been expecting a 6.1 percent lift. China provides combined data for January and February to limit distortions caused by the Lunar New Year holiday.

"Today’s data are broadly upbeat and suggest that the Chinese economy had a strong start to the year," said Capital Economics in a note.

Martin Rudings, senior dealer at OMF, also said the data was "quite strong" and likely gave the kiwi a lift. He said, however, the New Zealand dollar may not stay strong for long, in particular after news that US President Donald Trump is also looking to impose tariffs on up to $60 billion of Chinese imports, targeted at information technology, consumer electronics and telecom.

"I think there is a risk-off trade building" given the possibility of a global trade war, he said. "I think there is a background risk there, that markets are trying to brush off," he said.

Looking ahead, Rudings said markets will be watching for tomorrow's fourth-quarter gross domestic product data, with economists expecting a 0.8 percent quarter-on-quarter expansion, according to Bloomberg. Any upside surprise will benefit the kiwi.

The kiwi rose to 78.11 yen from 77.91 yen yesterday and gained to 93.19 Australian cents from 92.85 cents. It fell to 59.16 euro cents from 59.30 cents and dropped to 52.48 British pence from 52.60 pence. The kiwi traded at 4.6342 yuan from 4.6244 yuan.

New Zealand's two-year swap rate fell 2 basis point to 2.24 percent and the 10-year swap rate fell 4 basis points to 3.21 percent.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Wainui: Major Infrastructure Partnership For North Auckland

Minister of Housing and Urban Development Phil Twyford and Auckland Mayor Phil Goff today announced a partnership that will fund $91 million of roading and wastewater infrastructure to support the building of 9000 homes... More>>

ALSO:

NZ's Space Programme: Rocket Lab Reaches Orbit Again

Rocket Lab has continued the success of its 2018 orbital launch program with the launch of seven payloads to orbit. The mission marks Rocket Lab’s second successful orbital launch and deployment of customer satellites. More>>

ALSO:

Supreme Court: Labelling Swamp Kauri Slab A Tabletop Doesn't Make It One

New Zealand's highest court has ruled that exporting slabs of swamp kauri as "tabletops" or swamp kauri logs as "totem or temple poles" is illegal under the Forests Act. More>>

ALSO:

Starting Ending Offshore Drilling: Green Party Celebrate Passing Of Oil And Gas Bill

“This Bill is an essential first step in winding down offshore exploration for new sources of fossil fuels. We are in Government together to do this work, to create the change our people and our planet need to flourish." More>>

ALSO:

Reserve Bank: Official Cash Rate Unchanged

The Official Cash Rate (OCR) remains at 1.75 percent. We expect to keep the OCR at this level through 2019 and into 2020. More>>