NZ dollar slips in light trading as Chinese services growth slows
The New Zealand dollar slipped as slowing growth in China's services sector surprised investors in light trading today.
The kiwi fell to 82.56 US cents at 5pm in Wellington from 82.81 cents at 8am and 82.72 cents on Friday in New York. The trade-weighted index declined to 78.15 from 78.32 last week.
Stocks across Asia fell in Monday afternoon trading after the HSBC/Markit services sector Purchasing Managers' Index fell to 50.9 in December from 52.5 in the previous month. That's the slowest pace of expansion in six months. China's Shanghai Composite Index was down 2 percent at 5pm in Wellington, while Japan's Nikkei 225 index fell 1.9 percent and Australia's S&P/ASX 200 index dipped 0.5 percent.
"China's service PMI was quite a drop from the previous month and the market ran and sold Aussie and kiwi," said Imre Speizer, market strategist at Westpac Banking Corp in Auckland. "That was in thin liquidity, but we did get a small negative surprise."
Northern Hemisphere trading rooms will start getting back to full strength when they open today after the Christmas and New Year disruptions, and Westpac's Speizer expects the local currency will find support this week as investors look to take advantage of New Zealand's projected interest rate hikes.
A BusinessDesk survey of 11 traders and strategists predicts the kiwi may trade between 81.20 US cents and 84.50 cents this week, with US employment figures likely to be the major event on Friday in Washington. Nine expect the currency to rise while one says it will be unchanged and one expects a decline.
The kiwi fell from a six-year high 86.90 yen earlier today, trading at 86.70 yen at 5pm in Wellington, unchanged from the New York close.
The New Zealand dollar fell to 92.27 Australian cents from 92.52 cents on Friday in New York, and slipped to 60.78 euro cents from 60.90 cents last week. It traded at 50.45 British pence from 50.42 pence on Friday.