Waiting for China stats: kiwi and aussie volatile
The kiwi advanced to 93.85Ac at 8am in Wellington.
The New Zealand dollar gained against the Australian dollar overnight with volatility on the cross likely to continue as investors eye weakness in China's economy and sliding commodity prices.
The kiwi advanced to 93.85Ac at 8am in Wellington, from 93.49Ac at 5pm yesterday. It slipped to 64.37USc from 64.67USc yesterday.
The kiwi has flip-flopped against the Aussie so far this year as traders bet on the outlook for commodity prices amid a slowdown in China's economy. That volatility is set to continue over the day ahead as new data is released on Chinese growth, retail sales and industrial production, while oil prices continue to slide on concern about increased Iranian production and traders await tonight's GlobalDairyTrade auction, where prices for New Zealand's largest commodity export are expected to decline further.
"Oil prices have continued lower. That erased the gains out of the commodities and hence the Australian dollar came back down," said Stuart Ive, senior dealer, foreign exchange at OMF. "There is some pretty high volatility in this kiwi/Aussie cross at the moment. We could see a continuation of that volatility."
Mr Ive expects average prices on the GDT to be anywhere from flat to down 5% at tonight's auction, based on NZX milk price futures.
"That will add further pressure on the kiwi," he said.
The New Zealand Institute of Economic Research publishes its quarterly survey of business opinion this morning. That is expected to show business confidence improved towards the end of last year, while the Real Estate Institute expects to publish its latest house price data for December, which will be closely watched for signs of cooling in the Auckland market.
The New Zealand dollar slipped to 59.06 euro cents from 59.35 cents yesterday, slid to 45.15 British pence from 45.30 pence, edged lower to 75.52 yen from 75.83 yen and dropped to 4.2348 yuan from 4.2539 yuan. The trade-weighted index declined to 71.35 from 71.51 yesterday.
(BusinessDesk)
Tina Morrison
Tue, 19 Jan 2016
Tue, 19 Jan 2016
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Waiting for China stats: kiwi and aussie volatile
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