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Asian markets advance on a firm pace on Friday following yesterday’s advance on Wall Street, and renovated hopes of economic recovery. Euro and Pound trade slightly higher from yesterday’s lows.
Tokyo Nikkei 225 Index rises 1.66%, while South Korean Kospi Index trades 1.16% higher. Markets in Australia, New Zealand and Hong Kong are all going through gains ranging from 1% to 2.15%.
Japanese Machinery orders fell 22% year on year in March, but the decline was lower than expected, furthermore, Sony’s bright outlook for financial year has lifted investors sentiment and returned hopes of economical improvement to stock markets.
Euro and Pound rise from Thursday’s lows
EUR/USD has bounced up after hitting intra-week low at 1.3525 yesterday to reach 1.3665 session high on early Asian trade. At the moment, the Euro trades around 1.3625.
GBP/USD bounced yesterday at intra-week low at 1.5055 and has risen during U.S. And Asian session to take back some of the ground lost yesterday, reaching a session high at 1.5245.
USD/JPY has bounced at support level at 95.10 to break above resistance level at 95.75, reaching a session high at 96.20, to set back afterwards to levels around 95.90.Friday in Asia, the New Zealand dollar tumbled to its lowest level in almost 8-days against the Aussie after a report showed that New Zealand’s retail sales fell for the sixth consecutive quarter in the first three months of 2009 as consumers restrained spending, leaving the door open for more rate cuts to help the recession-hit economy. The kiwi also edged down against the currencies of U.S., Europe and Japan.
Aussie News
Statistics NZ reported today that when adjusted for inflation, retail sales volume for the first quarter declined 2.9 percent from the preceding quarter. The drop was more than double the previous record decline of 1.4 percent registered in June 2008 and March 1997.
The agency said the long term trend in total retail sales volumes has been declining since June 2007, having fallen a cumulative 6.7 percent since then, marking the longest and fastest period of decline since record keeping began in September 1995.
In terms of value, total retail sales for the quarter were down a seasonally adjusted 1.5 percent, the fourth straight quarterly fall and the largest in 12 years. The biggest declines were seen in motor vehicle sales, which were down 9.2 percent. Auto fuel retailing dropped 6.6 percent.
Since retail sales account for close to eight per cent of New Zealand’s gross domestic product, today’s report pointed to another sharp contraction in the first quarter, and more easing by the central bank.
New Zealand’s economy has been in recession since the start of last year as the global financial crisis exacerbated the effects of a rapidly cooling housing market, bringing about job cuts and stagnating incomes.
The Reserve Bank of New Zealand responded by cutting the key rate by a total of 575 basis points since last July to a record low 2.5 per cent. It has said last month it would keep the interest rate steady or lower until the latter part of 2010.
The New Zealand dollar slipped to 1.2853 against the Aussie during Asian deals on Friday. This set the lowest point for the kiwi since April 07. On the downside, 1.295 is seen as the next likely target for the NZ dollar. The aussie-kiwi pair was worth 1.2755 at Thursday’s close.
The kiwi tumbled to near a 2-month low of 1.2950 against the aussie on April 30. Although the kiwi gained 3% thereafter, it weakened again after hitting a 13-day high of 1.2569 on May 11. Thus far, the kiwi has declined 2% against the aussie.
In Asian trading on Friday, the New Zealand dollar dropped against the U.S. currency. At about 10:10 pm ET, the kiwi-greenback pair touched 0.5908, down from yesterday’s close of 0.5968. If the pair weakens further, it may likely target the 0.5865 level.
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