NZ dollar stalls awaiting new impetus

Tuesday 26th February 2019

The New Zealand dollar is little changed as traders await further news on a number of fronts to provide reasons to move the currency.

The kiwi was unchanged at 5pm in Wellington from 68.81 US cents at 8am and the trade-weighted index was at 74.32 points from 74.27.

“The market is just waiting for new developments on old stories” including the China-United States trade talks, the Brexit situation and more information on how China’s economy is faring, says Peter Cavanaugh, the senior client adviser at Bancorp Treasury Services.

US President Donald Trump has been stoking expectations for a favourable conclusion to the trade talks, saying on Monday that he expects to sign an agreement with Chinese President Xi Jinping “fairly soon” at another summit.

“We’re going to have a signing summit, which is even better,” Trump told journalists. He plans to host China’s president at his Mar-a-Lago estate in Florida next month.

On Sunday, Trump cancelled a scheduled increase in tariffs from 10 to 25 percent on about US$200 million of Chinese goods from early March to give the trade negotiators more time to reach a deal.

Cavanaugh says the market is also alert for more Trump tweets – the president will meet North Korean leader Kim Jong-un on Wednesday for talks on de-nuclearising the Korean peninsula.

A speech by deputy governor of the Reserve Bank, Geoff Bascand, came and went without ruffling the market, he says.

Bascand was again presenting reasons for the central bank to near double the minimum capital levels banks must hold.

The New Zealand dollar was trading at 96.10 Australian cents from 95.92, at 76.24 yen from 76.46, at 52.38 British pence from 52.60, 60.56 euro cents from 60.61 and 4.6070 Chinese yuan from 4.5889.

The two-year swap rate is at 1.8435 percent from 1.8430 on Friday and the 10-year swap rate is at 2.4300 percent from 2.4300.

(BusinessDesk)

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