NZ dollar weakens ahead of Chinese data

Written by admin on 30/07/2019 Categories: 苏州美睫

The New Zealand dollar weakened ahead of the release of Chinese data which is expected to show a slowdown in Asia’s largest economy, the country’s largest trading partner.


Locally, figures are expected to show inflation is accelerating.

The kiwi softened to 86.39 US cents at 8am in Wellington from 86.50 cents at 5pm on Tuesday. The trade-weighted index edged lower to 80.22 from 80.27.

Investors were nonplussed by the two main events overnight, a speech by the new Federal Reserve chairwoman Janet Yellen which elicited no new information, and a forecast decline in global dairy prices.

Wednesday’s focus is on a slew of data releases from China with some investors anticipating Chinese gross domestic product to soften more than economists expect.

“The potential big events turned out to be neutral and that’s why nothing really moved significantly last night,” said Imre Speizer, senior market strategist at Westpac. “The market is looking ahead to today’s Chinese data. That’s going to be the big event of today. It’s rumoured to be weaker than the consensus estimate.”

Economists expect the Chinese economy expanded at a 7.3 per cent annual pace in the first quarter, the slowest pace in five years and down from a previous rate of 7.7 per cent. China also publishes March data on retail sales, industrial production and fixed asset investment.

“The pace of Chinese growth will not only affect commodity currencies but could also have a significant impact on overall risk appetite and in turn other major currencies such as the dollar, euro and British pound,” BK Asset Management’s Kathy Lien said.

The prospect of slower Chinese growth also weighed on the Australian dollar overnight. China is Australia’s largest trading partner and the Aussie is considered a proxy for the Chinese currency.

The New Zealand dollar gained to 92.31 Australian cents from 92.10 cents.

In New Zealand the focus is on first quarter inflation figures and economists are expecting a 0.5 per cent rise in the quarter.

The kiwi slipped to 51.66 British pence from 51.74 pence, dropped to 62.55 euro cents from 62.60 cents and weakened to 87.98 yen from 88.15 yen.

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