The New Zealand dollar was little changed as manufacturing reports from major overseas economies raised concerns about global growth.
The kiwi edged up to 85.39 US cents at 8am on Tuesday in Wellington, from 85.37 cents at 5pm on Monday. The trade-weighted index weakened to 79.79 from 79.95.
Reports for March manufacturing in China, the US and Germany over the past 24 hours failed to meet expectations. That’s in contrast with New Zealand, where a report on fourth quarter gross domestic product printed in line with forecasts last week as the nation’s central bank raised the benchmark interest rate on concern about rising inflation.
“The China HSBC PMI, German PMI and the US Markit PMI were all weaker than expectations, delaying the view for recovery,” said the ANZ Bank. “Domestic factors ensure NZD/USD will remain strong on slow global growth.”
The German IFO business confidence survey for March will be closely watched by investors on Tuesday.
Also underpinning the New Zealand dollar against the US currency overnight, San Francisco Federal Reserve president John Williams suggested in an interview with the Washington Post that financial markets were wrong to interpret that the Federal Reserve would tighten monetary policy sooner than previously expected.
The New Zealand dollar touched a two-week low of 93.45 Australian cents, and was trading at 93.50 cents at 8am in Wellington from 93.97 cents.
Traders have increased their bets that the Reserve Bank of Australia will raise interest rates in the coming year, with the Overnight Swap Curve showing expectations for 16 basis points of hikes in the next 12 months, compared with expectations of 3 basis points of cuts at the start of the month.
The kiwi slipped to 87.28 yen from 87.43 yen, weakened to 61.70 euro cents from 61.84 cents and was unchanged at 51.76 British pence.