SFC: Australian, N.Z. Dollar Decline Before China Manufacturing Data
July 30 (Bloomberg) -- The Australian dollar weakened from near its strongest level since May before a report forecast to say manufacturing growth slowed for a third month in China, the South Pacific nation's largest trading partner.
New Zealand's dollar headed for a weekly drop as its central bank yesterday said deteriorating growth will slow interest-rate increases, damping demand for the nation's assets. Both currencies slid against the yen as Asian stocks ended five day of gains, damping demand for higher-yielding assets.
"The rumor is that the Chinese PMI number is going to be worse," said Tim Kelleher, vice-president of institutional banking and markets at Commonwealth Bank of Australia in Auckland. "Given that, you'd probably be looking to sell Aussie dollar strength."
Australia's currency slipped 0.2 percent to 89.82 U.S. cents as of 10:42 a.m. in Sydney from 90.05 cents in New York yesterday. The currency is still headed for a 6.9 percent advance this month. It dropped 0.5 percent to 77.77 yen.
New Zealand's dollar declined 0.3 percent to 72.14 U.S. cents from 72.38 in New York yesterday and 72.73 cents on July 23. It fell 0.6 percent to 62.46 yen.
The Australian dollar will find support near 89.75 U.S. cents and the kiwi may be bought near 72.10, said Kelleher, who recommended selling rallies in both currencies.
China's government-backed Purchasing Managers' Index for July will slip below 50 for the first time since February 2009, Glenn Maguire, chief Asia economist for Societe Generale SA in Hong Kong, said July 28. The median forecast in a Bloomberg News survey of 13 analysts is for a reading of 51.4 when the figure is released on Aug. 1.
China is Australia's largest trading partner and New Zealand's second-biggest export market. The MSCI Asia Pacific index declined 0.3 percent.
