The kiwi fell against the Australian dollar, with its direction likely to be largely dependent on how the Reserve Bank of Australia interprets strong Chinese manufacturing data when it reviews interest rates tomorrow.
BUSINESSDESK: The kiwi fell against the Australian dollar, with its direction likely to be largely dependent on how the Reserve Bank of Australia interprets strong Chinese manufacturing data when it reviews interest rates tomorrow.
The kiwi fell to 78.79 Australian cents at 5pm from 79.07 at the close of trading in New York on Friday, after reaching highest in level since October 10 last week.
It rose to 81.96 US cents from 81.82 cents.
China, New Zealand’s second-biggest export market, reported its official manufacturing gauge rose to 53.1 from 51.0 in February.
In contrast, the HSBC’s flash manufacturing, the unofficial reading of China’s PMI, last month showed the world’s biggest economy was headed for its fifth monthly contraction.
“The kiwi dollar is softer against the Australian dollar with the market questioning a rate cut after China’s official PMI figures were released,” said Dan Bell, currency strategist at HiFX.
“We saw the market long on New Zealand and Australian dollars this morning – we have just been drifting off this afternoon.”
The RBA is expected to slash interest rates by 74 basis points over the next 12 months, according to the Overnight Index Swap curve, narrowing the gap with New Zealand’s record low official cash rate of 2.5%.
New Zealand’s central bank is seen lifting the OCR by 28 basis points in the next 12 months.
In the US, the world’s largest economy, manufacturing data is set for release overnight, followed by Federal Reserve meeting minutes tomorrow.
The European Central Bank and the Bank of England are scheduled to meet this week to review interest rates.
There is no significant data set for release in New Zealand tomorrow.
The New Zealand dollar rose to 61.40 euro cents from 61.31 cents at the close of trading in New York on Friday and gained to 51.24 British pence from 51.09 pence.
The kiwi advanced to 68 yen from 67.74 yen.
The trade weighted index increased to 72.98 from 72.81.
