Kiwi holds above 81 US cents after tepid Japanese GDP
The New Zealand dollar holds above 81 US cents in local trading after weak Japanese growth figures and as investors await data on gross domestic product for the eurozone.
The New Zealand dollar holds above 81 US cents in local trading after weak Japanese growth figures and as investors await data on gross domestic product for the eurozone.
BUSINESSDESK: The New Zealand dollar held above 81 US cents in local trading after weak Japanese growth figures and as investors await data on gross domestic product for the eurozone.
The kiwi was little changed at 81.16 US cents at 5pm in Wellington from 81.13 cents at 8am and down from 81.31 cents at the close of trading in New York on Friday. The trade-weighted index fell to 72.99 from 73.11 last week.
Japan grew at an annual pace of 1.4% in the June quarter, according to government figures. That was less than the 2.3% forecast in a Bloomberg survey of economists.
Japanese consumers have been loath to ramp up spending and exporters have struggled as the world's third-biggest economy relies on the reconstruction effort after last year's earthquake and tsunami to drive growth.
"Japan had good growth last quarter, but a lot of the inputs really suffered and I don't know why expectations were so high," said Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney.
"It's a quiet start to the week" which has kept trading in the kiwi dollar limited, though that should pick up, he said.
Eurozone GDP figures out in the Northern Hemisphere session will be closely watched by traders looking for signs of improvement in the global economy, as will a Greek auction for short-term bills.
New Zealand's June quarter retail sales are due for release tomorrow and are expected to show 0.7% growth, according to a Reuters survey, while Fonterra's latest online auction is scheduled for Thursday in the US.
"The kiwi can grind a little bit higher on all the crosses this week," Mr Tennent-Brown said. "If volatility stays low and the data's OK it can definitely press a little bit higher."
Five analysts surveyed by BusinessDesk are picking the kiwi will fall this week as Europe's debt woes linger over global growth prospects. CBA's Tennent-Brown wasn't one of the survey participants.
Chinese investors are stoking demand for New Zealand dollar denominated, with the South Pacific nation seen as a relatively safe haven for investment, Finance Minister Bill English said in a speech at a conference on China today.
His comments come as Bloomberg data shows the correlation between the trans-Tasman currencies and global stocks fell from a record high. The link between the currencies and raw material costs is also fading.
Bloomberg reported the kiwi-greenback link to global stocks has fallen to 0.72 from a Jan. 9 record of 0.91. A value of 1 indicates the assets move in unison.
The New Zealand dollar fell to 66 euro cents at 5pm in Wellington from 66.18 cents last week, and decreased to 63.53 yen from 63.66 yen. It slipped to 76.84 Australian cents from 76.94 cents at the close of trading in New York on Friday, and declined to 51.78 British pence from 51.85 pence.