Bloomberg News

Aussie Dollar Nears One-Week Low as China’s Imports Slow

July 10, 2012

Australia’s dollar fell toward a one-week low after data showed imports rose less than forecast in China, the nation’s biggest trading partner.

The so-called Aussie slid for a third day against the yen ahead of a report economists said will show French industrial production shrank, adding to signs Europe’s debt crisis is hurting the economy. New Zealand’s dollar declined versus 15 of its 16 major counterparts as losses in Asian stocks sapped demand for higher-yielding currencies.

“The concern is that slower Chinese growth is going to be a negative factor for Australia,” said Todd Elmer, head of Group-of-10 currency strategy for Asia excluding Japan at Citigroup Inc. in Singapore. “Imports came in below expectations, which I think is why the Aussie is selling off.”

The Australian currency dropped 0.3 percent to $1.0180 as of 4:07 p.m. in Sydney from the close in New York yesterday, when it touched $1.0155, the lowest since June 29. The Aussie slid as much as 0.5 percent to 80.77 yen, the weakest since June 29, before trading at 80.93.

New Zealand’s dollar slid 0.3 percent to 79.44 U.S. cents and fetched 63.16 yen, 0.3 percent below yesterday’s close.

Australian government bonds were little changed, with the yield on benchmark 10-year debt at 3 percent. New Zealand’s two- year swap rate, a fixed payment made to receive floating rates, was unchanged at 2.7 percent.

The MSCI Asia Pacific Index of shares lost 0.4 percent.

Chinese Imports

China’s inbound shipments rose 6.3 percent from a year earlier, the customs bureau said in a statement today in Beijing, compared with the 11 percent median estimate in a Bloomberg News survey. Exports climbed 11.3 percent.

The world’s second largest economy is predicted to report a slowdown in the second quarter when it releases gross domestic product data on July 13. The country lowered interest rates on July 5 for the second time in a month to stimulate the economy.

“China is still slowing,” said Imre Speizer, a strategist in Auckland at Westpac Banking Corp. (WBC), Australia’s second-largest lender. “Probably, more stimulus will be required.”

Speizer predicts the Australian dollar will drop below 99 U.S. cents over the next couple of months.

In France, the euro area’s second-biggest economy, output from factories, mines and power plants may have declined 1 percent in May from April, when it rose 1.5 percent, according to a poll of economists ahead of today’s data.

Business Confidence

Australian business confidence fell to a 10-month low in June amid concern that Europe’s debt crisis and a slowdown in China will cool global demand for commodities.

National Australia Bank Ltd. (NAB)’s confidence index, based on a survey of more than 300 companies, fell to minus 3 last month from minus 2 in May, according to a report released today. The business conditions gauge, a measure of hiring, sales and profits, improved to minus 1 from minus 4.

Losses in New Zealand’s dollar were limited after data showed the country’s house prices climbed to a record last month and card spending increased.

House prices in New Zealand gained 0.3 percent in June from the previous month, when they increased 1.7 percent, according to an index published by the Real Estate Institute of New Zealand today. Spending on debit, credit and store cards also increased by 0.4 percent, another report showed, adding to signs of a recovery in domestic demand.

To contact the reporter on this story: Monami Yui in Tokyo at myui1@bloomberg.net

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net


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