Currency down on Chinese data

06:12, Jul 10 2012

The New Zealand dollar was down against the US dollar today after lower Chinese import data compounded overnight weakness in the currency.

China's imports rose 6.3 per cent in June from a year ago, less than half the forecast of a 12.7 per cent rise, while exports grew 11.3 per cent on the year, faster than expectations for a 9.9 per cent increase.

The kiwi recently traded at US79.32c, down from 79.60c earlier. On the Trade Weighted Index against major trading partners it was slightly up 72.40 from 72.36 this morning.

ASB's head of institutional foreign exchange Tim Kelleher said the Chinese trade data led to the day's weakness.

"There was a sell-off overnight and it tried to rally back this morning but the Chinese import data was quite weak and that seems to have been the catalyst for most of the weakness on the day.

"Even though Spain was allowed another year to meet its deficit targets, that had already been built into the markets.

"The 200 day moving average comes in at about US79.50c, so US79.50c to US79.75c will probably cap it again [overnight], and I'd say we'd probably ease back to US79 cents, maybe even US78.75c," Kelleher said.

He said Europe's reaction to the easing of Spain's repayment obligations was a "wait and see" scenario.

The kiwi recently traded at 77.99 Australian cents, down from 78.01 earlier. It was 63.07 Japanese yen, down from 63.37 earlier. It was at 51.17 pence, down from 51.27 earlier. It was at 64.56 euro cents, down from 64.61 earlier.

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