The New Zealand Dollar plunged on weak Chinese economic data that showed the property market in Asia’s biggest economy and New Zealand’s biggest trading partner grew slower than expected.
The kiwi stood at 86.27 US cents at the start of Monday trading in Wellington, down from 86.21 in 5 P.M. at the close of trade in New York. The NZ currency had closed at 86.42 cents in Wellington last Friday. The trade weighted gauge fell from 80.32 to 80.21 on Friday. The kiwi remained slightly unchanged at 63.01 euro cents from Friday’s close of 62.99 cents. It fell to 92.08 Aussie cents, down from 92.34 cents on Friday. It also slid to 51.30 UK pence from 51.44, and also declined from 87.70 yen to 87.63 yen.
A Chinese report released over the weekend showed that prices of new home in April grew the slowest in 11 months despite interventions by some local authorities, which resulted in removal of property curbs. Developers also failed to make a significant impact with their huge discounts, reported the Australian.
This has fuelled fears of an imminent property bubble, though Beijing has moved in to allay the fears.
“A property slowdown has long been desired by the authorities, but there is a risk this train could overrun the station,” said ANZ bank in a note.
The average prices of new homes in 70 major Chinese cities grew 6.7 percent last month from a year ago. This compares to the growth rate of 7.7 percent posted in March, according to Reuters. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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