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NZD remains above 68 US cents on US-China trade resolution hopes

Monday 25th February 2019

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The New Zealand dollar remained above 68 US cents as investors were hopeful the US and China will manage to hammer out a new trade deal. 

The kiwi was trading at 68.29 US cents at 7:45am in Wellington from 68.43 cents in New York on Friday. It was at 67.74 US cents at 5pm Friday in Wellington. The trade-weighted index was at 74.03 from 74.05 Friday in New York and 73.44 Friday in Wellington. 

After falling Friday amid concerns about what a ban on Australian coal imports through China's northern ports in Dalian might mean, the kiwi had collected itself "and gains strength on news of progressing US-China trade talks," said ANZ Bank FX/rates strategist Sandeep Parekh.

US President Donald Trump on Sunday raised hopes that the United States and China would settle their trade dispute, tweeting "very productive talks yesterday with China on Trade. Will continue today!" This followed news Friday that the US and China had reached an agreement on currency issues. According to Bloomberg the two sides haven’t yet agreed on the critical issue of enforcement in a proposed currency deal.

However, while markets are fairly upbeat the March 1 deadline is fast approaching and "the market is bracing for more volatility as talks move into the eleventh hour," ANZ Bank says. It notes there has been "little commitment on the extension of the deadline by the US with Trump adopting a wait and see approach."

Domestically investors will be watching for first quarter retail sales data. Economists are expecting a 0.5 percent on quarter lift, according to a Bloomberg poll.

The New Zealand dollar is trading at 95.73 Australian cents from 95.68 cents Friday. It is at 52.27 British pence from 52.21 pence and at 60.20 euro cents from 60.21. It is at 75.57 yen from 75.56 and at 4.5831 Chinese yuan from 4.5817.


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