NZ dollar dips vs. Australian dollar as Chinese trade figures beat expectations
By Paul McBeth
Aug 8 (BusinessDesk) - The New Zealand dollar declined against its trans-Tasman counterpart after Chinese trade figures beat expectations, stoking optimism Australia’s biggest trading partner won’t slow any further.
The kiwi fell to 87.68 Australian cents at 5pm in Wellington from 88.04 cents yesterday. The local currency traded at 79.60 US cents at 5pm from 79.56 cents at 8am, up from 74.66 cents yesterday.
China’s exports rose 5.1 percent and imports 10.9 percent last month, resulting in a US$17.8 billion trade surplus, according to official figures. That fuelled demand for the Australian dollar, which has been under pressure as the looming peak in its resources boom nears and as a slowing economy has prompted interest rate cuts by the central bank. The better than expected Chinese trade data overshadowed weaker Australian employment figures.
“This is short-term stuff – the Aussie is looking terribly weaker from where they’ve come from,” said Imre Speizer, market strategist at Westpac Banking Corp in Auckland. “The big trend for the kiwi/Aussie is to keep going (up) to the low 90s.”
Speizer said the markets had got over the Fonterra Cooperative Group food scare at the start of the week, which only lasted a day until investors realised there weren’t any blanket trade bans on New Zealand dairy products.
Fonterra chief executive Theo Spierings today said the dairy exporter hadn’t seen any sign of customers pulling back their business, and that it was too early to say whether the scare will hit its earnings.
New Zealand property continued to rise last month, gaining an annual 8.1 percent in July, according to QV. The country’s housing market has been a cause of concern for the Reserve Bank, which has been reluctant to use interest rates to deal with an asset bubble it says will affect financial stability rather than fuel wider inflation.
The kiwi traded at 76.92 yen from 76.80 yen yesterday after the Bank of Japan stuck to its planned monetary base expansion of 60 trillion yen to 70 trillion yen per year.
The local currency gained to 59.66 euro cents from 59.34 cents yesterday, and declined to 51.36 British pence from 51.50 pence. The trade-weighted index increased to 74.90 from 74.66 yesterday.