Slower Chinese import growth clips kiwi's wings
The Asian powerhouse is expected to show slower second quarter growth when it publishes gross domestic product figures later this week.
BUSINESSDESK: The New Zealand dollar fell in local trading after figures showed the pace of Chinese import growth was slower than expected, raising fears demand is waning in the world's second-biggest economy.
The kiwi fell to 79.30 US cents at 5pm from 79.66 cents at 8am and 79.60 cents yesterday. The trade-weighted index declined to 72.19 from 72.44.
China's inbound shipments rose 6.3% last month from June 2011, almost half the 11% increase forecast in a Bloomberg survey. Export growth slowed to 11.3%, for an annual surplus of US$31.7 billion.
That sapped investors' appetite for the trans-Tasman currencies, with the Australian dollar falling to $US1.0164 from $US1.0180 yesterday, and with the two nations increasingly exposed to Chinese demand.
"People have focused on the import number for the Australian and New Zealand dollars, and clearly interpreted that as a sign of weakness," said Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney.
China is expected to show slower growth in the second quarter when it publishes gross domestic product figures later this week. The kiwi fell to 5.0495 renminbi from 5.0751 renminbi yesterday.
Weighing on the currency was the New Zealand Institute of Economic Research's quarterly survey of business opinion, which showed firms are more pessimistic about the future.
Though Canterbury is beginning to show signs of recovery, the rest of the country is lagging, it said.
Traders will continue to watch the European finance ministers' summit in Brussels during the Northern Hemisphere trading session. The region's treasurers are seeking ways to shore up global confidence and cement a solution to Spain's banking crisis.
The yield on Spain's benchmark 10-year government bond rose to a month-high 7.08% yesterday, a level regarded as unsustainable.
The kiwi fell to 64.55 euro cents from 64.77 cents yesterday, and advanced to 51.56 pence from 51.33 pence. It fell to 63.01 yen from 63.33 yen and decreased to 77.95 Australian cents from 78.06 cents.
Paul McBeth
Tue, 10 Jul 2012
Tue, 10 Jul 2012
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Slower Chinese import growth clips kiwi's wings
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