NZ dollar falls on global growth doubts, before trade data

Monday 26th March 2012

The New Zealand dollar fell amid doubts that global growth will pick up pace as China’s manufacturers slow their output and traders await further signs of a revival in the US economy.

The New Zealand fell to 81.65 US cents from 81.88 cents at the close of trading in New York on Friday. The trade-weighted index decreased to 72.76 from 72.88.

Weakness in China, the world’s second-largest economy, gave investors cause for pause last week as a preliminary reading of the nation’s manufacturing gauge in March fell to its lowest level in four months. The kiwi and Australian dollars dropped sharply after the PMI, which came just two days after BHP Billiton, the world’s biggest miner, warned of flatter Chinese demand for iron ore.

“Investors’ risk appetite lost some of its heat last week, as global growth worries returned,” said Mike Jones, currency strategist at Bank of New Zealand.

In the US, the world’s largest economy, purchases of new homes unexpectedly fell in February for a month, down 1.6 percent to a 313,000 annual pace, according to figures from the Commerce Department. This is the lowest annual pace since October, helping to increase the likelihood that the Federal Reserve will keep interest rates lower for longer.

In New Zealand, overseas merchandise trade for February is set for release this morning.

The New Zealand dollar fell to 78.02 Australian cents from 78.18 cents at the close of trading in New York. It dropped to 51.44 British pence from 51.59 pence and declined to 61.53 euro cents from 61.69 cents.

The kiwi decreased to 67.24 yen from 67.40.

(BusinessDesk)

BusinessDesk.co.nz

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