The New Zealand dollar fell today despite faster-than-expected growth of consumer prices. The probable explanation for the lackluster performance was slow growth of Chinese industrial profits.
New Zealand’s Consumer Price Index rose 0.4% in the December 2016 quarter. Market participants were expecting the same 0.3% rate of growth as in the previous quarter. Meanwhile, China’s industrial profits increased 2.3% in December from a year ago, down from 14.5% in November, demonstrating the slowest pace of growth in a year. China is the biggest trading partner of New Zealand, thus China’s economic performance has a strong influence on New Zealand’s currency.
NZD/USD dropped from 0.7296 to 0.7233 as of 12:38 GMT today. EUR/NZD rallied from 1.4722 to 1.4816 while its daily low of 1.4690 was the lowest since December 13.
If you have any questions, comments or opinions regarding the New Zealand Dollar,
feel free to post them using the commentary form below.