The New Zealand dollar was little changed this morning on low liquidity as Australian markets are closed for a public holiday. The currency may decline later in the day following a report that Chinese imports unexpectedly dropped in May.
The kiwi was trading at 84.89 US cents at 8am in Wellington from 85.01 cents at the New York close and 84.86 cents in Wellington on Friday. The trade-weighted index was little changed at 79.18 from 79.11 on Friday.
A customs report at the weekend showed that while Chinese exports rose a more-than-expected 7 per cent in May from the year earlier, imports unexpectedly slumped 1.6 per cent. The drop wasn't forecast by any of the 42 economists in a Bloomberg News survey that had a median projection for a 6 per cent gain. China is the largest trading partner for New Zealand and Australia and the drop may weigh on the Australasian currencies.
"They are not importing as much, so it can be taken as a negative for the kiwi and the Aussie," said Martin Rudings, senior adviser at OMF. "Although the market is not racing out and selling at these levels, I think we will slowly drift down."
Rudings said the kiwi faced resistance around the 85-85.20 US cent level.
