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

 

NZ dollar softens after weak Chinese PPI

NZ dollar softens after weak Chinese PPI

By Jenny Ruth

Jan. 10 (BusinessDesk) - The New Zealand dollar softened slightly after technical factors kept a cap on the upside and after weaker than expected producer pricing data in China.

The New Zealand dollar eased to 67.87 US cents at 5pm in Wellington from 67.99 at 8.30am. The trade-weighted index fell to 73.29 points from 73.54.

Anthony Murphy, a dealer at OMF, says when the kiwi reached above the 68 US cent mark, it triggered selling to unwind some speculative positions.

However, improving sentiment limited the downside and the currency traded in a tight 67.70 US cents to 68.05 cents range throughout the day.

The data from China - New Zealand's biggest trading partner - showed producer prices rose 0.9 percent in December, the slowest pace of growth since September 2016. Economists had expected an increase of 1.6 percent.

China’s consumer inflation for the month rose 1.9 percent, below the 2.1 percent forecast.

The kiwi fell to 4.6052 Chinese yuan from 4.6313.

Financial markets are watching for signs that the world’s second-largest economy is being hurt by its trade dispute with the US.

However, positive indications from trade talks between officials of the two countries in Beijing earlier this week, which were extended by a day from the scheduled two days, have raised hopes that they’re making progress towards a resolution.

China’s Commerce Ministry said the talks were extensive and had established a foundation for resolving both countries’ concerns.

As well, the minutes from the US Federal Reserve’s last Federal Open Market Committee meeting, released early today New Zealand time, backed up comments chair Jerome Powell made in a speech last Friday that the Fed can be “patient” about raising interest rates further.

All in all, these developments have unwound the flight to safety in the US dollar seen last week. In particular, the market is now betting the Fed’s ratcheting up of its benchmark interest rate has halted for now.

Four hikes last year, including the one at the last meeting, had been driving the US dollar higher. Still, the Fed did have another two rate hikes pencilled in for this year, down from the three it had foreshadowed before its last meeting.

The New Zealand dollar eased to 94.41 Australian cents from 94.68 cents, 73.17 yen from 73.48, to 53.03 British pence from 53.12, and to 58.65 euro from 58.86.

The New Zealand two-year swap rate ended the session at 1.9139 percent from 1.9350 yesterday; the 10-year rate fell to 2.6100 percent from 2.6550.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Super Fund/Canada Bid v NZTA: Tow Preferred Bidders For Auckland Light Rail

The two preferred delivery partners for Auckland light rail have been chosen and a final decision on who will build this transformational infrastructure will be made early next year, Minister of Transport Phil Twyford announced. More>>

ALSO:

9.3 Percent: Gender Pay Gap Unchanged Since 2017

“While it has remained flat since 2017, the gender pay gap has been trending down since the series began in 1998, when it was 16.2 percent,” labour market statistics manager Scott Ussher said. More>>

ALSO:

Ex-KPEX: Stuff Pulls Pin On Media Companies' Joint Ad-Buying Business

A four-way automated advertising collaboration between the country's largest media companies is being wound up after one of the four - Australian-owned Stuff - pulled the pin on its involvement as part of a strategic review of its operations ... More>>

Bus-iness: Transdev To Acquire More Auckland And Wellington Operations

Transdev Australasia today announced that it has agreed terms to acquire two bus operations in Auckland and Wellington, reaching agreement with Souter Investments to purchase Howick and Eastern Buses and Mana Coach Services. More>>

ALSO: