close
MENU
1 mins to read

Dollar slips on weak Chinese data, may extend decline

Paul McBeth
Mon, 15 Sep 2014

The New Zealand dollar fell after weak Chinese data dimmed the outlook for the world's second-biggest economy as traders awaited the US Federal Reserve meeting and local figures on growth and the balance of payments.

The kiwi slipped to 81.28 US cents at 5pm in Wellington from 81.58 cents at 8am and 81.51 cents on Friday in New York. The trade-weighted index declined to 78.11 from 78.53 last week.

Weaker than expected Chinese industrial output, retail sales and fixed-asset investment eroded optimism the world's second biggest economy is on the mend, sapping investor appetite for nations such as New Zealand and Australia which count China as a major trading partner. That comes ahead of the US Federal Open Market Committee policy review, which may heighten expectations for higher US interest rates and firm up support for the greenback.

"China is still responding to tightening from way back, and will probably have to loosen a little bit more," said Imre Speizer, market strategist at Westpac Banking Corp in Auckland. "In the very short-term that will be a negative for most commodity currencies, more for the Aussie than the kiwi."

The kiwi will probably trade between 79.60 US cents and 83.40 cents this week, according to a BusinessDesk survey of 10 currency traders and strategists. Five pick the local currency to decline, three say it will probably remain relatively unchanged and two expect a gain.

Westpac's Speizer said the local currency will probably head towards 80.50 US cents this week with the Fed review the biggest event, though the upcoming milk auction on Fonterra Cooperative Group's GlobalDairyTrade platform, New Zealand's second quarter gross domestic product figures and the upcoming general election will also weigh on the kiwi.

The kiwi rose to 90.30 Australian cents at 5pm in Wellington from 90.16 cents on Friday in New York, and declined to 87.18 yen from 87.48 yen. It was little changed at 62.71 euro cents from 62.86 cents, and traded at 50.05 British pence from 50.10 pence.

(BusinessDesk)

Paul McBeth
Mon, 15 Sep 2014
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Dollar slips on weak Chinese data, may extend decline
41388
false