Kiwi heads for 1.2% weekly fall as weak Chinese PMI adds to souring mood
The New Zealand dollar is heading for a 1.2 percent weekly fall against the greenback as weaker than expected Chinese manufacturing added to a souring mood among investors looking for reasons to sell.
The kiwi traded at 82.71 US cents at 5pm in Wellington from 82.77 cents at 8am, down from 83.15 cents yesterday. The trade-weighted index decreased to 75.78 at 5pm from 75.96 yesterday and is heading for a 0.8 percent weekly decline.
Chinese manufacturing came in short of expectations, adding to the downbeat tone for the kiwi after government figures showed the fourth-quarter terms of trade fell 1.3 percent, when analysts were picking a gain of 1.3 percent.
Investors have shed their optimism this week after the Italian election threw a spanner in the works by putting up an unworkable parliament and reigniting fears about European sovereign's ability to service their debt.
"We were expecting a little correction in risk sentiment and confidence, and the Italian election looks like a bit of an excuse," says Dan Bell, currency strategist at HiFX in Auckland.
"This year has been one of the most bullish years for stock markets ever and it doesn't surprise me to see a little pull back" which has weighed on the kiwi.
He says the local drought will start having a bigger impact on New Zealand's economy, which will probably be seen as a negative for the currency.
The kiwi was little changed at 62.24 euro cents from 62.24 cents yesterday, and slipped to 54.50 British pence from 54.81 pence. It slipped to 80.83 Australian cents from 80.91 cents and decreased to 76.65 yen from 76.76 yen.