The Australian and New Zealand dollar lift after China data

The Australian and New Zealand dollars lifted on Friday reacting to a survey of Chinese manufacturing index, which came in surprisingly high.

The Aussie and kiwi managed to keep lifting on Friday after the release of Caixin Chinese manufacturing data, which came in surprisingly high.

The Caixin/Markit Manufacturing purchasing managers’ index (PMI) for February came in at 49.9 points, rising from the 48.3 points in January.

Economists had expected the sector to fall below the 50-mark that separates expansion and contraction, at a reading of 48.5 points..

In response to the data the Aussie dollar jumped up to $0.7105, from a low of $0.7090, after being down 0.4% on the week.

The kiwi dollar edged up to $0.6814, from $0.6797.

Australia’s sliding house prices

Australia’s housing prices have been one of the topics of concern this week, after Australia’s central reserve bank warned that a further significant fall in prices could undermine household spending.

The warning comes ahead of CoreLogic figures that show home prices fell nationally an additional 0.7% in February. January also saw a drop of 1%.

Australia's GDP anticipation

Analysts suspect weakness in consumption will impact Australia's Gross Domestic Product (GDP) which is to be released next week.

Analysts expect GDP to slow to a below-trend 2.3 % in 2019, with investors already pricing in the risk of a cut in interest rates this year. Futures implying around an 80% probability of a quarter point easing in the 1.5% t cash rate.

New Zealand data released on Friday showed the country's terms of trade fell a surprisingly sharp 3% in the last quarter. New Zealand government bonds also slipped, pushing yields up 1 to 2 basis points.

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