NZ dollar pares gains ahead of US inflation
NZ dollar pares gains ahead of US inflation after run of weak data
By Jonathan Underhill
April 17 (BusinessDesk) - The New Zealand dollar pared its gains against the greenback ahead of US inflation data, on concern a strong number could make up for a string of recent weak economic data and reignite talk of Federal Reserve rate increases.
The kiwi dollar traded at 76.61 US cents as at 5pm in Wellington, having reached a three-month high of 76.97 cents overnight, from 75.94 cents yesterday. The trade-weighted index was at 79.83, having touched a nine-month high of 80.08, from 79.34 yesterday.
Economists expect the US core consumer price
index rose 0.2 percent, in March, while prices stalled in
the year. The CPI figures come after March industrial
production and the April Empire manufacturing survey printed
weaker than expected, while US retail sales missed
expectations, adding to speculation that the Fed may not
raise interest rates as early as June.
"A lot of the data
we've been seeing out of the US has been a bit weaker, which
is why the kiwi and the Aussie rallied," said Mitchell
McIntyre, senior dealer at NZForex. "Anything close to
expectations or better in the US CPI, I think you're going
to see the kiwi and the Aussie slammed."
That could see the kiwi back below 76 US cents on Monday morning, he said.
The kiwi traded at 71.11 euro cents, having reached as high as a record 71.53 cents overnight, from 71.01 cents yesterday.
The Financial Times reported that the International Monetary Fund earlier this month had rebuffed an informal approach by Greece to delay pending loan repayments. European officials such as IMF chief economist Olivier Blanchard are highlighting the possibility of a Greek exit from the Eurozone, saying this week that for the rest of the Eurozone a Greek exit "would not be smooth sailing, but it could probably be done", the FT reported.
"More and more people think they might be in a bit of trouble - other Euro zone members are more willing to take a hardline stance " McIntyre said. "We're seeing a greater and greater probability of a Grexit scenario."
Also out tonight is inflation data for the Eurozone and US consumer confidence, while European Central Bank president Mario Draghi is scheduled speak during the weekend following IMF meetings in Washington
The New Zealand dollar advanced to 98.45 Australian cents from 97.81 cents yesterday, gained to 51.31 British pence from 51.17 pence, and rose to 91.18 yen from 90.58 yen.
(BusinessDesk)