Latest Chinese manufacturing data impacts kiwi dollar

The New Zealand dollar eased after weaker-than-expected manufacturing data in China signalled a risk of a further slowdown in the world’s second-largest economy.

The kiwi was trading at US66.62c from US66.70c. The trade-weighted index was at 72.68 points from 72.71.

China’s latest Purchasing Manager Index came in at 50.2 points instead of the 51 points expected by analysts, suggesting the economy of New Zealand’s largest trading partner may still be slowing.

“The market dipped after the Chinese data came in weaker than expected,” says Tim Kelleher, head of foreign exchange sales at ASB Bank.

Local data showing continued poor business sentiment was largely discounted because the survey period was conducted in the aftermath of the Christchurch terrorist attack and before the Government canned a capital gains tax.

Kelleher said the market is focusing on today’s local labour force data as it tries to decide whether Reserve Bank governor Adrian Orr will cut interest rates next week or not. Economists are expecting the Marchquarter unemployment rate to fall to 4.2 per cent from 4.3 per cent in 2018.

The New Zealand dollar was trading at 94.55 Australian cents from 94.46 cents, at 51.47 British pence from 51.54 pence, at 59.54 euro cents from 59.60 cents, at 74.28 Japanese yen from 74.45 yen and at 4.4885 Chinese yuan from 4.4897 yuan.

The New Zealand two-year swap rate rose to 1.6687 per cent from 1.6480 while the 10-year swap rate rose to 2.2250 per cent from 2.1930.