Monday 18th February 2019
|Text too small?|
The New Zealand dollar started the week on the front foot as investors were buoyed by positive noises coming from the latest round of trade talks between the US and China.
The kiwi traded at 68.58 US cents as at 8am in Wellington from 68.63 cents on Friday in New York, up from 68.26 cents in Asia last week. The trade-weighted index was at 74.43 from 74.48 last week.
US President Donald Trump said the trade talks went extremely well after Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer visited Beijing last week. Talks will continue this week, and Trump has indicated a willingness to delay imposing new tariffs on Chinese products that are scheduled to come into effect in early March.
Investor sentiment was also buoyed by US policymakers averting another Federal government shutdown after Trump signed a budget bill. However, at the same time, he declared a national emergency to direct funds to build a wall on the Mexican border, which was a major stumbling block in reaching a deal.
"Positive US-China trade headlines have buoyed risk sentiment with kiwi coming along for the ride," ANZ Bank New Zealand economists Sandeep Parekh and Miles Workman said in a note. "We continue to expect recent strength in kiwi to retrace in time."
Local data today include the Business New Zealand performance of services index and Statistics New Zealand's December accommodation survey. Local tourism data is under greater scrutiny at the moment after China's Global Times reported dwindling tourist appetite to travel to New Zealand.
Bank of New Zealand senior markets strategist Jason Wong said that deterioration hadn't grabbed the attention of investors yet, despite its potential to damage the local economy if China pulls back on trade and restricts access to New Zealand exporters.
Late Friday, the Ministry for Primary Industry said New Zealand's primary products continue to clear the border in China as usual, despite reports of retaliatory hold-ups at Chinese ports in reaction to the Government Communications Security Bureau blocking telecommunications firm Huawei from partnering with local company Spark.
New Zealand has an extensive trading relationship with China, valued at more than $28 billion a year. As with any large trading relationship, temporary technical trade issues can occur from time to time with products at the border, MPI said.
The kiwi decreased to 4.6415 Chinese yuan from 4.6449 yuan last week and traded at 95.96 Australian cents from 96.00 cents.
The local currency was little changed at 60.73 euro cents from 60.80 cents on Friday in New York and decreased to 53.06 British pence from 50.23 pence. It traded at 75.73 yen from 75.82 yen last week.
No comments yet
NZ dollar rides Australian dollar coat-tails higher
Electricity switching at four-year low amid high wholesale prices
S&P lowers Asset Finance's credit rating to
Trade Me halts sales of semi-automatic firearms
NZ service sector expansion slows in February
Synlait and Fonterra to report diverging earnings
Metroglass downgrades profit again
18th March 2019 Morning Report
NZ 4Q GDP growth likely muted
NZ dollar rangebound; focus on domestic GDP and US Federal Reserve