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.
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