The New Zealand dollar edged lower after trading in a tight 30 basis point range overnight. Today traders are looking for direction from Chinese monthly economic reports in anticipation the data will show Asia's largest economy is steady to improving.
The kiwi weakened to 86.17 US cents at 8am in Wellington from 86.21 cents at 5pm yesterday, trading between 86.06 cents and 86.37 cents. The trade-weighted index slipped to 80.08 from 80.10 yesterday.
Investors are eyeing reports out of China today in what is known as the "monthly data dump" providing an insight into how Asia's largest economy was tracking in April. Data on fixed asset investment, retail sales and industrial production, scheduled for release at 5:30pm New Zealand time, is expected to show China's economy was stable to improving. China is New Zealand's largest trading partner.
"Chinese releases have been more optimistic of late and we expect that theme to continue today," ANZ Bank New Zealand strategist Carrick Lucas and senior foreign exchange strategist Sam Tuck said in a note. "Chinese data has been positive of late and we would expect the April releases to point toward a steady Chinese economy, lending support to NZD."
The New Zealand dollar slipped to 91.99 Australian cents from 92.09 cents yesterday ahead of Australia's federal budget, scheduled for release at 9:30pm New Zealand time.
New Zealand's 2014 government budget scheduled for release on Thursday is expected to show the nation is on track to return to surplus within a year, while Australia faces at least another four years of deficits, ANZ said.
