Trade deal and Chinese data boost the kiwi
The New Zealand dollar rose after slightly better than expected Chinese data boosted hopes that the United States-China phase one trade deal signed this week will mean the trade war will cease battering China’s economy.
The kiwi was trading at 66.42USc at 5pm in Wellington from 66.30 at the same time on Thursday and compared with 66.31 in New York last Friday. The trade-weighted index was at 72.66 points from 72.51.
China’s fourth-quarter GDP rose 6 per cent from the same quarter a year earlier, as expected, but 8 per cent annual retail sales growth in December beat expectations of 7.9 per cent while industrial production growth of 6.9 per cent compared with expectations of 5.9 per cent.
That suggested China’s economy has stabilised and near-term momentum is picking up. China is both New Zealand and Australia’s largest trading partner, while Australia is New Zealand’s second-largest trading partner and the largest destination for New Zealand’s manufactured exports.
“That stuck a bit of a rocket under the kiwi,” said Mike Shirley, a dealer at Kiwibank.
Chinese officials have been painting the economic outlook as brighter, with VicePremier Liu He telling journalists he expects China’s economy to perform well this year.
The New Zealand dollar was trading at
96.34 Australian cents from 96.02 on Thursday, at 50.80 British pence from 50.82, at 59.67 euro cents from 59.45, at 73.20 yen from 72.88 and at 4.5632 Chinese yuan from
4.5642.
The two-year swap rate rose to a bid price of 1.2049 per cent from 1.1949, while 10-year swaps nudged up to 1.6750 per cent from
1.6450.