NZ dollar gains in local trading as Chinese data improves, threats remain
By Paul McBeth
Nov. 12 (BusinessDesk) - The New Zealand dollar gained in the local trading session as Chinese data showed the world's
second-biggest economy was rebalancing towards domestic consumption, soothing fears of a sharp slowdown.
The kiwi rose to 81.58 US cents at 5pm in Wellington from 81.39 cents at 8am and 81.45 cents on Friday in New York. The
trade-weighted index advanced to 73.06 from 72.94 last week.
Chinese industrial product gained 9.6 percent last month from a year earlier and retail sales rallied 15 percent,
stoking optimism the world's most populous nation won't slow down as fast as earlier feared and drag down the global
economic recovery. Still, investors are concerned about the US ability to bridge a gap between opposing political
parties and avoid the 'fiscal cliff' of US$600 billion in tax hikes and federal spending cuts.
"Chinese demand is becoming more refocused on domestic consumption - the retail sales pick up shows more sustainable
Chinese growth," said Imre Speizer, market strategist at Westpac Banking Corp in Auckland. "The fiscal cliff is the
biggie to watch this week" and the kiwi may "drift lower down to 80.60 US cents" as investors remain nervous about the
global situation, he said.
Five of six traders and strategists in a BusinessDesk survey say the kiwi may weaken this week after last week's
household labour force survey showed unemployment at a 13-year high, lending greater weight to third-quarter data,
including retail sales on Wednesday.
The kiwi traded at 64.83 yen from 64.71 yen last week after government figures showed Japan's economy shrank 0.9 percent
in the September quarter, and is at risk of tipping in recession with a contraction forecast for the December period.
New Zealand's currency edged up to 64.12 euro cents from 64.06 cents on Friday in New York after Greek legislators
agreed to deep budget cuts in a bid to secure its bail-out package. European finance chiefs will meet today in Brussels
to discuss the rescue funding.
The kiwi dollar was little changed at 78.31 Australian cents from 78.38 cents last week, and edged up to 51.31 British
pence from 51.23 pence.
(BusinessDesk)