NZ dollar little changed after soft US manufacturing; payrolls loom
By Paul McBeth
Oct. 2 (BusinessDesk) - The New Zealand dollar held near 64 US cents as a weaker-than-expected US manufacturing gauge
eroded optimism from Chinese industrial production, as traders await US payrolls data which will feed into the Federal
Reserve's interest rate review.
The kiwi was little changed at 63.97 US cents at 8am in Wellington from 64.08 cents late yesterday. The trade-weighted
index traded at 69.75 from 69.82 yesterday.
The US Institute for Supply Management manufacturing index fell in September to 50.2, missing market expectations, and
sapping investors' appetite for risk-sensitive assets, which had been bolstered by a better-than-expected Chinese
manufacturing gauge yesterday.
The manufacturing data comes ahead of the US non-farm payrolls report on Friday in Washington, which is expected to show
the world's biggest economy added 201,000 jobs last month. Employment is a key component for the Fed when reviewing
interest rates, and markets are undecided on whether the US central bank will start tightening policy this month or in
"In our session, positive China PMI readings boosted risk appetite and saw NZD break (above) 0.64 decisively," Bank of
New Zealand currency strategist Raiko Shareef said in a note. "But a disappointing US ISM knocked markets back onto the
defensive. We continue to look for NZD outperformance in the near-term, but are wary of souring risk sentiment."
Investors will be watching Australian consumer spending data today for direction during the Asian trading session ahead
of the US payrolls report. The kiwi traded at 90.97 Australian cents from 90.87 cents yesterday.
A manufacturing gauge for the Euro-zone met expectations, with an expansionary reading of 52, though German industrial
production slowed and investors will be watching to see the fall-out of the Volkswagen emissions scandal. The kiwi fell
to 57.19 euro cents from 57.54 cents yesterday, and traded at 42.27 British pence from 42.37 pence.
The local currency fell to 76.76 yen from 77.10 yen yesterday, and slipped to 4.0690 Chinese yuan from 4.0760 yuan.