The New Zealand dollar is expected to decline on Monday over weekend data that showed that Chinese imports surprisingly fell in May.
The Kiwi traded at 84.89 US cents at the opening of Monday trade in Wellington from Friday’s close of 84.86 cents. The Chinese customs administration reported that the country’s exports grew faster than estimated at 7 percent last month from a year ago while imports surprisingly declined 1.6 percent. Economists surveyed by Bloomberg News had expected imports to gain by 6 percent.
China is New Zealand and Australia’s biggest trading partner and the decline in imports may impact their respective currencies.
“They are not importing as much, so it can be taken as a negative for the kiwi and the Aussie,” Martin Rudings, a senior adviser at OMF, told 3 News. “Although the market is not racing out and selling at these levels, I think we will slowly drift down.”
The U.S. dollar rallied on data released on Friday that indicated that 217,000 new nonfarm workers were hired in May, exceeding market expectations and strengthening belief that the economy is on the right economic growth trajectory after a weak performance in the first quarter.
“I am looking for a stronger US dollar going forward and a weaker local currency,” said Mr Rudings. “These are good levels to sell.”
New Zealand is expected to release the wholesale trade report in the first quarter today, with Australian financial markets shut down for a national holiday on Monday.
The New Zealand dollar remained slightly unchanged at 90.90 Australian cents from Friday’s 90.95 cents. It also stood at 62.21 euro cents from 62.14 cents on Friday and 86.97 yen from 86.83 yen. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Jonathan Millet at email@example.com