NZ dollar ticks up on Chinese PMI report

Article – BusinessDesk

Jan. 24 (BusinessDesk) – The New Zealand dollar market gleaned support from a positive purchasing managers’ report in China after earlier being reassured by a vote that bought time on the US debt ceiling issue.

NZ dollar ticks up on Chinese PMI report

Jan. 24 (BusinessDesk) – The New Zealand dollar market gleaned support from a positive purchasing managers’ report in China after earlier being reassured by a vote that bought time on the US debt ceiling issue.

The kiwi was at 84.32 US cents at 5pm from 84.18 US cents at 8am and 84.05 cents at 5pm on Wednesday.

News that the HSBC Flash China manufacturing PMI rose to 51.9 in January from 51.5 in December helped the kiwi off its lows in afternoon trading.

It was the fifth consecutive monthly rise in the purchasing managers’ index, which is at a two-year high.

“Despite the still tepid external demand, the domestic-driven restocking process is likely to add steam to China’s ongoing recovery in the coming months,” Hongbin Qu, head of Asian economic research at HSBC, said.

Traders said the index was credible and any strength in the Chinese economy would be welcomed in this part of the world, given Europe’s difficulties and the budget problems in the US.

However, approval of an increase to the US federal borrowing ceiling for three months took the heat out of that issue.

Otherwise traders noted that the International Monetary Fund (IMF) had trimmed its 2013 forecast for global growth to 3.5 percent from the 3.6 percent it projected in October.

“The IMF’s chief economist played down concerns that easy monetary policies in advanced economies risk sparking a ‘currency war’, saying there had not been a major surge of capital into emerging nations,” HiFX analysts said.

ASB’s Jane Turner said there was a small but growing chance the Reserve Bank of New Zealand would look at using macro-prudential tools over the coming year to try to ease housing market pressures.

ASB has also tweaked its view of the next move in the official cash rate by the central bank.

“We now expect the RBNZ to leave the OCR on hold until March 2014 – this compares to our expectation of a September 2013 increase just six weeks ago at the December monetary policy statement,” she said.

The kiwi topped 80.17 Australian cents from 79.78 cents at 5pm on Wednesday.
It was at 75.24 yen from 74.48 yen, 63.32 euro from 63.14 euro and 53.27 British pence from 53.09 pence.

The trade-weighted index was at 75.64 from 75.45 at 5pm on Wednesday.

(BusinessDesk)

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