Kiwi holds above 85 US cents as Chinese imports beat expectations

The New Zealand dollar held above 85 US cents in local trading after Chinese import figures were ahead of expectations, raising trade prospects with the world's second-biggest economy.

The kiwi traded at 85.24 US cents at 5pm in Wellington from 85.17 cents at 8am and 84.86 cents yesterday. The trade-weighted index advanced to 78.36 from 78.24.

Chinese imports grew 14 percent in March from a year earlier, according to official figures, beating a Bloomberg survey of economists' consensus for a 6 percent gain. China is New Zealand's second-largest trading partner.

The Chinese trade data underpinned gains in the trans-Tasman currencies, which are already gaining as investors look for safe and solid returns, with central banks in Japan and the US printing massive amounts of money to revive their faltering economies and devaluing the yen and greenback in the process.

"It's another bit of supportive data flowing through to the mix, but it's all driven from the yen," says Alex Hill, currency strategist at HiFX in Auckland.

"We're seeing a lot more investment in commodity currencies off the back of the weakening yen - a lot from institutions and even private money in these high yielders."

He says the kiwi may continue to press towards 86 US cents to 87 cents having broken out of its recent range.

It rose to 84.47 yen from 84.21 yen yesterday as investors continue to look outside the world's third-biggest economy after the Bank of Japan embarked on a stimulus programme rivalling that of the US Federal Reserve.

Local figures showed New Zealand spending on electronic cards fell 0.5 percent last month failed to dim the attraction of the local currency.

A new 2020 government bond maturity attracted $2.8 billion of bids for the $2 billion on offer.

Investors will be looking at the minutes from the latest Federal Open Market Committee meeting when they are published overnight in Washington and Australian employment figures tomorrow.

The kiwi traded at 81.40 Australian cents from 81.35 cents yesterday, and edged up to 65.12 euro cents from 65.05 cents. It was little changed at 55.60 British pence from 55.59 pence.

(BusinessDesk)