The ‘Kiwi’ was able to achieve 85.38 against the US Dollar, its highest level for over 18 months, during local trade after Chinese data showed that imports to the Asian nation gained by more than twice as much as economists anticipated in March. A slight downward correction saw the South Pacific currency slip to 85.29 before the close of trade.
The New Zealand Dollar exchange rate was trading in the region of 0.8350 against the US Dollar as of 10:27 am
With the import news boosting the prospects of two of China’s key trading partners, Australia and New Zealand, the currencies of both South Pacific nations strengthened following the data release.
Although Chinese exports rose by less-than-expected in March, the nation’s imports rebounded significantly, advancing by 14.1 per cent from a year earlier.
Economists had predicted a rebound of just 6 per cent. Although the data is less-than-positive for China, it does improve New Zealand’s trade outlook.
In reference to the Australian Dollar’s gains one economist noted: ‘Given that China imports from Australia, [the rebound in imports] is seen as benefiting Australia. Near term, there’s scope for the Aussie to go higher.’
The same principle could be applied to the ‘Kiwi’.
As well as strengthening against the ‘Greenback’ the New Zealand Dollar gained on the Japanese Yen and several of its other most traded peers.
When asked about the ‘Kiwi’s current strength economist Peter Dragicevich commented: ‘Increasing foreign demand for New Zealand government bonds and ongoing re-insurance inflows associated with the Christchurch earthquake have been a key feature behind the firm NZD.’
The New Zealand Dollar could experience additional movement tonight following the release of New Zealand’s Performance of Manufacturing Index for March. The data is scheduled for publication at 23:30 GMT
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