The New Zealand dollar fell overnight, following commodity prices lower, as investors remained nervous about weakness in the Chinese economy ahead of a manufacturing gauge released today.
The kiwi declined to 62.88 US cents at 8am in Wellington from 63.14 cents yesterday. The trade-weighted index edged lower to 68.36 from 68.43 yesterday.
The Thomson Reuters/Core Commodity CRB Index, a measure of 19 commodity prices, fell 1 percent to 194.8 as investors weigh up the strength of China's economy, which has been slowing in recent months on reduced industrial production and a slow transition to consumer-driven growth. Traders will get an update on how quickly China is winding back production with the Caixin purchasing managers' index measure of manufacturing activity today.
"As the focus of concern appears to remain squarely on China, global commodity prices resumed their fall," Bank of New Zealand senior market strategist Kymberly Martin said in a note. The Caixin China manufacturing PMI "will be the next big test for both the AUD and NZD."
Martin said the manufacturing gauge will be important for the kiwi/Australian dollar cross, with Australian exporters more exposed to a downturn in Chinese manufacturing, and a weak print would weigh more heavily on the Aussie. The local currency was little changed at 88.67 Australian cents from 88.57 cents, and fell to 4.0080 Chinese yuan from 4.0233 yuan yesterday.
