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NZ dollar weaker but back above 65 US cents after mixed data

NZ dollar weaker but back above 65 US cents after mixed US data


By Rebecca Howard

May 31 (BusinessDesk) - The New Zealand dollar was weaker early but did pare some losses on a slighty softer greenback after mixed US data, including weaker-than-expected inflation.

The kiwi was trading at 65.06 US cents at 8:10am in Wellington versus 65.25 US cents at 5pm in Wellington. It touched an overnight low of 64.93 US cents. The trade-weighted index was at 71.80 points from 71.98.

The kiwi lifted back above 65 US cents on continued weakness in US inflation as it "will bolster some calls for a rate cut from the US Federal Reserve," said ANZ FX/rates strategist Sandeep Parekh.

US inflation was weaker than initially thought in the first quarter, with the personal consumption expenditures price index, excluding the volatile food and energy components, increasing at a 1 percent rate last quarter, well below the Federal Reserve's 2 percent target.

Pending US home sales were also weaker than expected, down 1.5 percent on the month in April. "The monthly decline adds to signs of a soft housing market," said Parekh. On the other hand, US first quarter gross domestic product data was revised down by less-than-expected and consumption and exports were stronger than initially reported.

Parekh said that risk sentiment remains the biggest driver for the kiwi. In focus today will be the ANZ consumer confidence numbers followed by China's manufacturing data, particularly in the light of ongoing trade tensions between the US and China.

The New Zealand dollar was at 94.14 Australian cents from 94.07, at 51.59 British pence from 51.62, at 58.42 euro cents from 58.54, at 71.26 yen from 71.53 and at 4.4899 Chinese yuan from 4.5065.

BusinessDesk)

ends



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