Sharechat Logo

NZ dollar falls vs yen as investors seek safe havens ahead of Trump's China tariff decision

Friday 7th September 2018

Text too small?

The New Zealand dollar fell against the yen as investors flocked to the relative safety of Japan's currency ahead of US President Donald Trump's decision on whether to impose tariffs on another US$200 billion of Chinese imports. 

The kiwi fell to 73.01 yen as at 8am in Wellington from 73.32 yen yesterday. It was largely unchanged at 65.88 US cents from 65.84 cents. 

Japan's yen and the Swiss franc both strengthened 0.7 percent as investors sought out safe-haven assets ahead of Trump's decision on whether to extend tariffs on Chinese products. The White House is expected to proceed with the increased protections, with data this week showing the US trade deficit with China widened in July. The US-China trade war has weighed on currencies of exporting nations such as New Zealand. Reserve Bank governor Adrian Orr is set to deliver a speech this morning on geopolitics.

Trump "is widely expected to go ahead with additional tariffs, but the devil will be in the detail, such as phasing, and whether he then threatens (again) tariffs on the full US$500-plus billion of Chinese imports," Bank of New Zealand senior markets strategist Jason Wong said in a note. "Against that backdrop, the safe-haven yen and Swiss franc are the best performing currencies."

Local data today include second quarter wholesale trade, which will feed into economists' forecasts for gross domestic product. After that, investors will look ahead to US employment data, which will likely show strong employment growth. 

The kiwi slipped to 91.49 Australian cents from 91.78 cents yesterday after Australia & New Zealand Banking Group and Commonwealth Bank of Australia joined Westpac in raising variable mortgage rates across the Tasman. The Reserve Bank of Australia kept the target cash rate at 1.5 percent on Tuesday, noting that mortgage rates were still lower than a year earlier.

The local currency traded at 4.5004 Chinese yuan from 4.5015 yuan yesterday and was little changed at 50.93 British pence from 50.99 pence. It edged up to 56.68 euro cents from 56.60 cents yesterday. The trade-weighted index was at 71.53 from 71.59. 

(BusinessDesk)

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: NZ shares fall as investor uncertainty weighs on exporters; F&P Health, A2 drop
NZ dollar drops below US68c on plan to up bank capital
Noel Leeming fined $200,000 for misleading consumers
Big four banks face stiffer capital requirements from RBNZ
Infratil signals A$50m investment in Canberra Data Centres
Govt provides $2.5 mln to develop Opotiki aquaculture
Labour co-ordinator role may alleviate kiwifruit labour shortage
NZ manufacturing activity chugs along in November
Australia's GWA lobs in $118M bid for Methven
Govt leaves door open for higher emissions price cap

IRG See IRG research reports