The New Zealand and Australian dollars touched their lowest levels in almost two weeks after weaker-than-expected trade data from China, the largest trading partner for both countries.
The kiwi touched 74.20 US cents and was trading at 74.40 cents at 8am in Wellington, from 74.49 cents at 5pm yesterday. The Aussie touched 75.50 US cents and was recently trading at 75.91 cents from 75.85 cents yesterday.
Chinese data yesterday showed export sales contracted 15 per cent in March from the year earlier, while imports shrank 12.7 per cent, the third straight month of declines, raising concerns about weak domestic demand. The kiwi and Aussie dropped sharply on the news yesterday on concern for exports of commodities such as milk powder and iron ore, and held at low levels overnight.
" The unexpected slump in China exports may have been a result of seasonal disruptions rather than soft demand, but the import numbers were still pretty weak," Kymberly Martin, senior market strategist at Bank of New Zealand, said in a note. "The moves show how sensitive the market remains to any signs of softness in the China economy."
Following the data, the World Bank lowered its 2015 China growth forecast to 7.1 per cent from a previous estimate of 7.2 per cent, and its 2016 estimate to 7 per cent from 7.1 per cent. Asia's largest economy will release its first quarter gross domestic product data on Wednesday. Economists forecast growth slowed to 7 per cent in the first three months of the year, the weakest pace in six years, CNBC reported.
