Concerning Chinese PMI data left the commodity-driven New Zealand Dollar struggling against its major rivals overnight.
The GBP/NZD pairing surged yesterday as the Pound was buoyed by upbeat UK employment data and largely retained gains into Australasian trading.
The ‘Kiwi’ then went on to post widespread declines and consolidated previous losses against the Pound as HSBC/Markit flash PMI for the world’s second largest economy unexpectedly fell below the 50 mark separating growth from contraction.
The measure slid from 50.5 to 49.6 in January in spite of economists expecting a reading of 50.4.
In a statement accompanying the data one of HSBC’s chief economists noted; ‘The marginal contraction of January’s headline HSBC Flash China Manufacturing PMI was mainly dragged by cooling domestic demand conditions. This implies softening growth momentum for manufacturing sectors, which has already weighed on employment growth. As inflation is not a concern, the policy focus should tilt towards supporting growth to avoid repeating growth deceleration seen in 1H 2013.’
After the data was published the ‘Kiwi’ hit a low of 82.74 against the US Dollar and sank to 49.93 British pence.
The South Pacific currency proved unable to recover ground even as a measure of consumer confidence for New Zealand surged from 129.4 in December to 135.8 in January – the highest reading since before the onset of the global economic crisis in 2008.
As ANZ economist Cameron Bagrie states; ‘We’re left with an impression of elevated levels of consumer optimism. That’s a good sign for some post-Christmas cheer across the retail sector now that the silly season and traditional bout of December euphoria has passed.’
While the result supports the case for the Reserve Bank of New Zealand increasing interest rates this year, the Chinese figures outweighed the domestic report and left the ‘Kiwi’ floundering.
Earlier in local trading New Zealand’s performance of manufacturing index was released, with the gauge coming in at 56.4 in December from a positively revised 57.0 in November.
While today’s UK CBI reported sales report could have an impact on the GBP/NZD pairing, economists will also be focusing on tomorrow’s credit card spending report for New Zealand.
Current New Zealand Dollar (NZD) Exchange Rates:
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
New Zealand Dollar,
,US Dollar,0.8296,
New Zealand Dollar,,Euro,0.6091,
New Zealand Dollar,,Australian Dollar,0.9407 ,
New Zealand Dollar,,Pound Sterling,0.4994 ,
US Dollar,,New Zealand Dollar,1.2074 ,
Euro,,New Zealand Dollar,1.6424 ,
Australian Dollar,,New Zealand Dollar,1.0597 ,
Pound Sterling,,New Zealand Dollar, 2.0030 ,
[/table]
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