NZ dollar falls; traders seek clues to pace of global growth

NZ dollar falls as traders seek clues to pace of global growth

March 26 (BusinessDesk) – The New Zealand dollar fell as investors await more evidence of the pace of global growth, including Chinese manufacturing and US consumer confidence and durable goods orders.

The New Zealand fell to 81.60 US cents at 5pm from 81.65 cents at 8am and 81.88 cents at the close of New York trading on Friday. The trade-weighted index decreased to 72.72 from 72.88.

Chinese manufacturing figures this week are expected to show declining activity in the world’s second-biggest economy, after the HSBC Flash PMI, a lead indicator of factory activity, raised expectations of a harder than expected landing. In the US tomorrow, the Conference Board’s gauge of consumer confidence is forecast to be 70 this month, according to a Bloomberg survey, near the one-year high of 70.8 reached in February. Durable goods orders in the U.S. probably rebounded from their decline in February.

The Dollar Index, a measure of the greenback against a basket of currencies, fell 0.5 percent to 79.36 on Friday in New York after US home sales unexpectedly fell in February. That sparked fears the US recovery may not be as embedded as previously thought after a string of upbeat data prompted traders to start betting on an earlier Federal Reserve rate hike than the end of 2014.

“US data momentum looks like it’s turning lower, which should push the US dollar down,” said Imre Speizer, market strategist at Westpac Banking. “The pull back last week looks like a correction on the prior rally and the kiwi looks like its multi-day trend is upwards.”

New Zealand merchandise trade showed a surplus of $153 million in February, though weaker import and export volumes may have been impacted by ongoing industrial action at Ports of Auckland.

Speizer said on a multi-week basis he still expects the kiwi dollar will decline. People are focusing on US and Chinese data, with the speed of America’s recovery slowing and China’s economic activity winding down.

The New Zealand dollar fell to 77.99 Australian cents from 78.18 cents last week, and was little changed at 67.44 yen 67.40 yen. It declined to 61.53 euro cents from 61.69 cents last week, and dropped to 51.54 pence from 51.59 pence.

(BusinessDesk)

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