Kiwi rises as Asian stocks gain amid Chinese stimulus hopes
BUSINESSDESK: The New Zealand dollar followed Asian equity markets higher amid hopes China's government will boost stimulus policies to stop the slowdown in the economy.
The kiwi rose to 82.27 US cents from 82.02 cents at 8am and 81.77 cents yesterday. It increased to 64.46 yen from 64.21 yen yesterday and the trade weighted index climbed to 73.38 from 73.06.
China's Shanghai Composite Index has fallen about 4% this year over concern the world's second-biggest economy is not acting fast enough to soften its economic slowdown.
Stocks rallied across the region as investors bet China will step up efforts to prevent a hard landing. The Shanghai Composite Index rose 2%, Hong Kong's Hang Seng Index climbed 1.1% and Australia's S&P/ASX 200 index increased 0.7%.
"Today's it's been the Asian markets opening with a positive tone that's given the New Zealand dollar a boost," says Dan Bell, currency strategist at HiFX. "There's not a lot of good news out there. It's a bit of positioning helping lift the kiwi."
The local currency was little changed after the New Zealand Institute of Economic Research said economic growth is set to slow in the second half of the year as local businesses got gloomier in the third quarter in a deteriorating trading environment.
It predicts the pace of annual growth will slow to 1.5% in the second half of the year from 2.6% at the end of June.
New Zealand's credit and debit card spending fell 0.6% last month, ending August's gains after Kiwis reduced spending on consumable items such as food and liquor. Economists were predicting a decline of 0.3%.
There is no significant New Zealand set for release tomorrow. The accommodation survey for August will be released on Thursday, as well as the food price index for September from Statistics New Zealand.
That is followed by the ANZ-Roy Morgan Consumer Confidence and Bank of New Zealand performance of manufacturing index set for release on Thursday afternoon.
The kiwi was little changed at 80.34 Australian cents from 80.47 cents yesterday. It rose to 51.28 British pence from 50.74 pence and gained to 63.35 euro cents from 62.94 cents.