Kiwi falls as Chinese manufacturing disappoints, RBNZ looms
Investors are also preparing for tomorrow's Reserve Bank meeting.
The New Zealand dollar fell after a measure of Chinese manufacturing showed slower growth than expected, feeding fears the world's second-biggest economy will not be able to underpin global expansion, and ahead of tomorrow's monetary policy review.
The kiwi fell to 83.93 US cents at 5pm in Wellington from 84.13 cents at 8am, and 84.32 cents yesterday. The trade-weighted index declined to 77.66 from 78.01.
The HSBC Flash Purchasing Managers Index fell to 50.5 in April from 51.6 in March, missing estimates in a Bloomberg survey of 51.5. The unofficial PMI measure comes a week after China's gross domestic product printed at a weaker-than-expected 7.7 percent.
"The market is paying more attention to the data out of China, particularly when it comes to the New Zealand and Australian dollars," says Dan Bell, currency strategist at HiFX in Auckland.
"Today's data reinforces the current view that there's this underlying weakness in the global economy, and that's starting to show up in China a little more."
China is Australia's largest export market and New Zealand's second-largest after Australia and its economy – the fastest-growing among developed nations – is seen as a barometer of global growth and demand.
Investors are preparing for tomorrow's Reserve Bank meeting, where governor Graeme Wheeler is expected to keep the benchmark rate at a record-low 2.5 percent while trying to talk down the currency, which has been trading above its projected average for the TWI of 75.6 in the first quarter and 75.5 in the second.
"All Wheeler's got is his words, so he should be using them wisely," he says.
The kiwi traded little changed at 81.97 Australian cents and slipped to 64.43 euro cents from 64.52 cents. It fell to 54.97 British pence from 55.38 pence and dropped to 83.2.90 yen from 84.13 yen.
(BusinessDesk)
Paul McBeth
Wed, 11 Jul 2018
Wed, 11 Jul 2018
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Kiwi falls as Chinese manufacturing disappoints, RBNZ looms
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