NZ dollar rallies as Chinese trade surplus grows, stoking confidence in economy
By Paul McBeth
Jan. 10 (BusinessDesk) - The New Zealand gained as a stronger-than-expected Chinese trade surplus stoked investors'
confidence the world's second-biggest economy has weathered a slowdown and can regain momentum.
The kiwi gained to 84 US cents at 5pm in Wellington from 83.82 cents at 9am and 83.81 cents yesterday. The
trade-weighted index climbed to 75.66 from 75.44.
China's trade surplus almost doubled to US$31.6 billion in December from the same month a year earlier on a 14 percent
jump in exports and a 6 percent increase in imports. China is Australia's biggest trading partner and New Zealand's
second-biggest behind its closest neighbour, meaning its economic fortunes weigh heavily on the trans-Tasman currencies.
New Zealand government figures today showed a slightly wider-than-expected local trade deficit of $700 million in
November, while QV data showed property values rose 5.7 percent last year and ANZ figures showed an increase in
commodity prices last month.
"The kiwi data continues to be positive and China's recovery is starting to show evidence and today's trade data added
to that," said Imre Speizer, market strategist at Westpac Banking Corp in Auckland. "The kiwi will continue to
outperform - look at economic fundamentals and they're pretty good, the outlook is pretty good and interest rates will
eventually turn positive."
Speizer said he expects the currency to temporarily shed some gains against the greenback for a few days before rising
to test the 84.75 US cents high it reached last year.
The kiwi fell to 79.61 Australian cents at 5pm from 79.85 cents yesterday after the Chinese trade data, with the bigger
nation having greater export exposure to the world's most populous country. Official figures also showed Australian home
building permits rose 2.9 percent in November as lower interest rates encouraged plans for apartment projects.
The New Zealand dollar climbed as high 74.08 yen, the highest level since September 2008, and traded at 73.93 yen at 5pm
from 73.28 yen yesterday. Japan's currency weakened after Prime Minister Shinzo Abe urged the central bank to double its
inflation target to 2 percent. Bank of Japan governor Masaaki Shirakawa yesterday said he's working closely with the
government ahead of the bank's next meeting on Jan. 21 to 22.
The kiwi gained to 64.34 euro cents from 64.08 cents yesterday ahead of the European Central Bank's monetary policy
review, and increased to 52.42 British pence from 52.22 pence before the Bank of England reviews its benchmark interest
rate and quantitative easing programme.
(BusinessDesk)