Dollar gains after Chinese central bank adds more stimulus
The kiwi advanced to 76.94 US cents at 8am in Wellington, from 76.80 cents at the New York close.
The New Zealand dollar gained after the Chinese central bank added more liquidity to Asia's largest economy in a bid to boost growth, stoking optimism about the prospects for the nation's largest trading partner.
The kiwi advanced to 76.94 US cents at 8am in Wellington, from 76.80 cents at the New York close and 76.59 cents at 5pm in Wellington on Friday. The trade-weighted index rose to 80.06 from 79.80 on Friday.
The People's Bank of China yesterday cut the reserve requirement ratio for all banks by 100 basis points from today, allowing banks to reinvest or lend more money. It made larger reductions for specialist banks loaning in the agricultural or small business sector. The RRR cut, the second this year, comes after data last week showed the Chinese economy expanded 7 percent in the first quarter, the slowest pace in six years.
"(The) New Zealand dollar has been boosted by further Chinese stimulus," ANZ Bank New Zealand senior economist Sharon Zollner and senior FX strategist Sam Tuck said in a note. "The RRR cut is expected to release 1.2 trillion yuan in liquidity to support demand."
ANZ said the Chinese move will dominate the Asian trading session today.
In New Zealand today, traders will be eyeing first-quarter inflation data at 10:45am. The Consumers Price Index is expected to slip 0.2 percent from the previous quarter, and advance 0.2 percent from the same quarter a year earlier, according to a Reuters poll of economists.
Also due for release today is the BNZ-BusinessNZ Performance of Services Index for March at 10:30am.
ANZ expects the kiwi to trade between 76.30 US cents and 77.80 cents today.
The New Zealand dollar slipped to 98.26 Australian cents from 98.38 cents on Friday, after touching 98.92 cents over the weekend.
The local currency increased to 51.43 British pence from 51.28 pence on Friday, gained to 91.38 yen from 91.10 yen and was little changed at 71.08 euro cents from 71.07 cents.,
(BusinessDesk)
Tina Morrison
Mon, 20 Apr 2015
Mon, 20 Apr 2015
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Dollar gains after Chinese central bank adds more stimulus
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