Aussie Falls After Chinese Imports Drop Exceeds Forecasts

Australia’s dollar fell after a report today showed a bigger-than-expected decline in Chinese imports, damping the outlook for the South Pacific nation’s overseas shipments of commodities.

The New Zealand dollar and the so-called Aussie fell versus most major peers after China’s customs administration said today imports fell 15.2 percent in February from a year earlier, after a 28.8 percent increase in January. China is the biggest trading partner of both Australia and New Zealand. Australia’s bonds fell, sending yields to a two-week high.

China’s trade report “is not great news for the Aussie dollar,” said Imre Speizer, a strategist at Westpac Banking Corp. in Auckland. “The thing people will be looking into is why were imports so weak.”

The Australian dollar fell 0.2 percent to $1.0242 as of 4:46 p.m. in Sydney, paring its weekly gain to 0.4 percent. It added 0.3 percent to 97.69 yen, after reaching 97.77, the most since August 2008. New Zealand’s currency lost 0.3 percent to 82.56 U.S. cents, little changed since March 1. The so-called kiwi gained 0.3 percent to 78.74 yen.

The median estimate of economists surveyed by Bloomberg News was for an 8.5 percent decline in Chinese imports. Exports increased 21.8 percent, today’s data showed, compared with economist estimates for an 8.1 percent advance.

“The 15 percent fall in imports is not great,” said Michael Turner, a fixed-income strategist in Sydney at Royal Bank of Canada. “There looks to have been a little bit of weakness for iron ore in particular in February,” Turner said, referring to Australia’s biggest export.

Iron Ore

The price of the key steelmaking ingredient fell to $146.30 a metric ton yesterday from a 16-month high of $158.90 on Feb. 20, according to a gauge compiled by The Steel Index Ltd.

Figures due tomorrow may indicate China’s industrial production increased 10.3 percent last month from the same period in 2012, a separate poll of economists showed.

The Aussie rose 1.4 percent in the past month, while its New Zealand peer gained 0.8 percent, according to Bloomberg Correlation-Weighted Indexes tracking 10 developed-nation currencies.

Employers in the U.S. probably added 165,000 jobs last month after increasing payrolls by 157,000 in January, according to the median economist forecast before today’s Labor Department report. The jobless rate held at 7.9 percent, the poll showed.

“Positive U.S. payrolls is positive for the Aussie dollar,” said Andrew Salter, a currency strategist at Australia & New Zealand Banking Group Ltd. in Sydney. “The outlook for the Australian dollar remains that it’s very hard to construct a case where the currency goes down by a material amount.”

Bonds Fall

Australia’s 10-year yield rose as much as 11 basis points, or 0.11 percentage point, to 3.56 percent, the highest since Feb. 21. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates that is sensitive to interest-rate expectations, was little changed at 3 percent.

Demand for the kiwi was supported by data showing New Zealand’s budget deficit was narrower than forecast and house prices rose the fastest since 2008.

The country’s operating deficit before gains and losses was NZ$2.51 billion ($2.1 billion) in the seven months to Jan. 31, the Treasury Department said in e-mailed statement. Quotable Value New Zealand said annual house price inflation was 6.3 percent last month from 6.2 percent through January.

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