Kiwi little changed as patchy US data keeps QE3 alive
BUSINESSDESK: The New Zealand dollar was little changed as "patchy" US data keeps markets prepped for the Federal Reserve to print more money, helping boost equities across the Asia Pacific.
The kiwi traded at 80.59 US cents at 5pm in Wellington from 80.68 cents at 8.30am and 80.51 cents yesterday. The trade-weighted index rose to 72.81 from 72.56 yesterday.
Stocks across Asia followed Wall Street higher after weak US manufacturing and zero inflation last month kept traders betting the Fed will unveil its third round of quantitative easing at the central bankers' summit at Jackson Hole, Wyoming, on August 31.
Japan's Nikkei 225 index rose 1.6% in afternoon trading, while Australia's S&P/ASX 200 index was up 0.9% and Hong Kong's Hang Seng rose 0.3%.
"US data is pretty patchy – sometime it's good, sometimes it's bad," said Tim Kelleher, head of institutional FX sales NZ at ASB Institutional in Auckland. "The kiwi tried to rally today but it's looking heavy."
Mr Kelleher maintained his downward bias on New Zealand's currency, saying it is trading at the bottom of its range between 81.25 US cents and 81 cents.
Investors were not swayed by a 7.8% gain in the trade-weighted price of dairy products sold on Fonterra's online trading platform, GlobalDairyTrade.
Dairy prices are bouncing back from a three-year slump after a stellar local season and as droughts in the US, Europe and India keep a lid on supply.
New Zealand manufacturing activity shrank last month, according to the BNZ-BusinessNZ performance of manufacturing index, its first contraction for a quarter.
The kiwi gained to 63.91 yen from 63.40 yen yesterday, and was little changed at 76.86 Australian cents from 76.82 cents.
It advanced to 65.85 euro cents from 65.29 cents yesterday, and edged up to 51.43 pence from 51.37 pence.