Dollar weakens after Chinese data shows slowdown in property market
The New Zealand dollar weakened after Chinese data at the weekend signalled a slowdown in the property market of Asia's largest economy.
The kiwi was at 86.27 US cents at 8am in Wellington, from 86.21 cents at the New York close and 86.42 cents at 5pm in Wellington on Friday. The trade-weighted index slipped to 80.21 from 80.32 on Friday.
China, Australia and New Zealand's largest trading partner, released a report at the weekend showing new home prices in April rose in the fewest cities for 18 months even as developers offered deep discounts and some local governments eased property curbs. Concern about the effects of a deflating property bubble in China may weigh on the kiwi and Aussie today, strategists said.
"A property slowdown has long been desired by the authorities, but there is a risk this train could overrun the station, "ANZ Bank New Zealand senior economist Sharon Zollner and senior foreign exchange strategist Sam Tuck said in a note.
"The New Zealand forestry industry is directly exposed to a slowdown in China construction, but the most important channels for a broader impact on New Zealand could be headlines about any resulting financial sector woes hitting the New Zealand dollar and commodity prices as China's near-term growth prospects are reassessed."
ANZ expects the kiwi to trade between 86.10 US cents and 86.80 cents today.
At 10:30am traders will be eyeing the BNZ-BusinessNZ PSI monthly survey of the services sector for April while at 10:45am the Statistics department publishes the first quarter producers price index.
The New Zealand dollar slipped to 92.08 Australian cents, from 92.34 cents on Friday. The slowdown in the Chinese property market and a drop in iron ore prices may weigh on the Aussie today, Kymberly Martin, senior market strategist at Bank of New Zealand, said in a note.
The kiwi was little changed at 63.01 euro cents from 62.99 cents on Friday, slipped to 51.30 British pence from 51.44 pence and weakened to 87.63 yen from 87.70 yen.