NZ dollar pares gains after China surplus
Tue, 10 Apr 2012 8:10p.m.
The New Zealand dollar fell in local trading after China unexpectedly reported a trade surplus, dampening speculation the People's Bank of China will loosen monetary policy to support growth.
The New Zealand dollar fell to 82.01 US in New York.
The trade weighted index rose to 73.28 from 73.13.
China unexpectedly reported a trade surplus in March, stoking optimism the PBOC won't need to cut rates to stimulate the world's second-biggest economy.
The surplus was $US5.35 billion, the customs bureau said, beating a deficit of $US3.15 billion predicted by economists in a Bloomberg News survey.
Exports rose 8.9 percent from a year earlier, while inbound ships increased 5.3 percent.
"The New Zealand dollar rallied through most of the morning," said Dan Bell, currency strategists at HiFX.
"Then we had a larger than expected trade surplus and that has given the market more confidence that China hasn't fallen off a cliff."
Mr Bell said the New Zealand dollar remains range-bound, trading at the top end of its recent range of 80.50 US cents to 82.60 cents.
Federal Reserve chairmen Ben Bernanke today delivered a speech titled Fostering Financial Stability, which reinforced his view that the world's largest economy hasn't fully recovered from the global financial crisis.
A US Labor Department report on Friday revived speculation the Fed will embark on another round of on another round of quantitative easing after it showed weaker-than expected jobs growth, which boosted demand for high-yielding currencies such as the Kiwi.
The New Zealand dollar rose to 79.54 Australian cents from 79.16 cents last week. The Kiwi gained to 62.45 euro cents from 62.27 cents on Friday in New York and was little changed at 51.48 British pence from 51.46 pence. It increased to 66.73 yen from 66.50 yen.
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