News Column

NZ Dollar Advances After China PMI

June 30, 2014

CANBERA (Alliance News) - The New Zealand dollar climbed against the other major currencies in Asian morning deals on Tuesday, as data showed that China's manufacturing activity improved in June, indicating that the stimulus measures introduced by Beijing is showing results.

Data from China Federation of Logistics and Purchasing and National Bureau of Statistics showed that China's manufacturing PMI rose to 51% in June, from 50.8% in May. The June reading matched forecasts.

According to data released by HSBC and Markit economics, China's final manufacturing PMI rose to 50.7 in June, up from 49.4 in May. The final estimate was slightly below the preliminary figure of 50.8.

China being a major trading partner for New Zealand, a rebound in former's factory activity would improve trade prospectus.

The kiwi that closed Monday's trading at 0.8755 against the greenback and 88.67 versus the yen advanced to 0.8772 and 89.03, respectively. If the kiwi extends gain, it is likely to resistance around 0.88 against the greenback and 91.2 against the yen.

The NZ currency ticked up to 1.5605 against the euro, which may be compared to Monday's closing value of 1.5630. The next possible upside target level for the kiwi is seen around the 1.55 area.

The kiwi reversed from an early low of 1.0768 against the aussie and edged up to 1.0743. The kiwi is likely to find resistance around the 1.07 mark.

Australia's consumer confidence fell by 0.3 points to 105.4 in the week ended June 29, survey by ANZ-Roy Morgan Research showed.

Looking ahead, the Reserve Bank of Australia's interest rate decision is due at 12:30 am ET. The bank is seen keeping rates on hold at 2.50%.

The PMIs from major European economies, German unemployment rate for June and Eurozone jobless rate for May are due in the European session.

From the US, ISM manufacturing for June and construction spending for May are set for release in the New York session.

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Source: Alliance News

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