News Column

NZ Dollar Rises After China Services PMI Hits 15-month High

July 2, 2014



BRUSSELS (Alliance News) - The NZ dollar dollar strengthened against most major currencies in the Asian session on Thursday after the release of a report showing an expansion of China's services sector activity at a 15-month high in June.

The latest survey from HSBC and Markit Economics revealed that the China's services sector grew at a faster pace in June-posting an index score of 53.1 and touching a 15-month high. That's up from 50.7 in May.

That lifted China's composite PMI to 52.4 - up from 50.2 in the previous month.

The data indicated that a solid rise in activity at service providers and renewed output growth at manufacturers supported the faster expansion of output at the composite level. Furthermore, manufacturing output increased at the strongest pace since last November, while services activity growth was the quickest since March 2013.

The NZ dollar rose to a 3-day high of 1.555 against the euro, from an early low of 1.5608. At yesterday's close, the kiwi was trading at 1.5556 against the euro. If the kiwi extends its rise, it is likely to find resistance around the 1.54 area.

Moving away from an early multi-day low of 0.8744 against the US dollar, the kiwi advanced to a 2-day high of 0.8775. The pair was quoted at 0.8770 at yesterday's close. The kiwi may find resistance around the 0.88 area.

The kiwi which ended yesterday's deals at 89.22 against the yen strengthened to a 3-month high of 89.39. This may be compared to an early low of 89.13. On the upside, 89.90 is seen as next resistance level for the kiwi.

A survey by Markit Economics showed that Japan Services PMI edged down to 49.0 in June from 49.3 in May, signaling contraction for the third consecutive month. The decrease in service sector output was driven by the recent increase in sales tax.

Looking ahead, the European Central Bank will announce its interest rate decision. Economists expect the bank to retain interest rates unchanged at 0.15%. At 8:30 am ET, ECB President Mario Draghi gives press conference following interest rate announcement.

In the New York session, US jobs data and ISM non-manufacturing PMI for June, weekly jobless claims for the week ended June 28 and trade data for May are set to be released.



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Source: Alliance News


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