Kiwi little changed after Chinese activity hits eight-month high
BUSINESSDESK: The New Zealand dollar was little changed after Chinese manufacturing figures showed industrial activity in the world's second-biggest economy was at an eight-month high in October, stoking optimism about the prospects for global growth.
The kiwi traded at 82.21 US cents at 5pm in Wellington from 82.22 cents at 8am and 82.15 cents yesterday. The trade-weighted index was at 73.33 from 73.25 yesterday.
China's Purchasing Managers' Index rose to 50.2 in October from 49.8 in September, the National Bureau of Statistics said today, in line with economists' expectations and the first time the series has been in expansion for three months. The reading helped soothe fears China's economy was in for a tougher downturn.
The kiwi traded at 5.1270 yuan from 5.1264 yuan yesterday.
"The overall feeling is China might have bottomed earlier in the year," says Dan Bell, currency strategist at HiFX in Auckland. "Investors are quite happy picking up on the extra yield they're getting in New Zealand dollars compared to other major currencies."
Trading has been thin this week after New York City was buffeted by Cyclone Sandy, which shuttered the stock exchange. New Zealand's currency has been stuck in a 2.5 US cents trading range since September 12 as investors prepare for a series of event risks, including the US presidential election next week.
The race between incumbent Barack Obama and Republican contender Mitt Romney is neck-and-neck, with the polls showing no clear leader. The result is being keenly watched as the winner will have to address a series of legislated budget cuts set to come into effect in December.
Before the November 6 election, investors will be looking for US employment figures on Friday, as the Federal Reserve uses the labour market recovery as its barometer for injecting more stimulus into the world's biggest economy.
The kiwi rose to 65.80 yen from 65.37 yen yesterday and traded at 79.19 Australian cents from 79.16 cents. It traded at 63.38 euro cents from 63.39 cents yesterday and fell to 50.94 British pence from 51.08 pence.