Wednesday 29th August 2018
|Text too small?|
The New Zealand dollar held its gains against the greenback as Canada headed back to the bargaining table with the US and Mexico, however, upcoming US and domestic data could knock it off its perch.
The kiwi traded at 67.10 US cents at 5pm in Wellington versus 67.09 cents at 8am, up from 66.81 cents late yesterday. The trade-weighted index increased to 72.30 from 72.08.
The local currency benefited from improving risk appetite after the US and Mexico agreed to new trade terms and Canada headed back to the bargaining table. Canadian Foreign Minister Chrystia Freeland arrived in Washington to meet with US counterparts while Prime Minister Justin Trudeau said they looked forward to signing a deal "as long as it's good for Canadians." A number of contentious issues, however, persist, including around dairy and Canada's supply management system.
According to The Canadian Press, Larry Kudlow, the director of the president’s National Economic Council, and Commerce Secretary Wilbur Ross both said Tuesday concessions from Canada on dairy are essential to getting a deal. Trudeau, however, has said he won't back down. "We will defend supply management," he said.
While trade ructions percolate in the background, the focus will now shift to the US second-quarter gross domestic product report for a steer on the health of the world's biggest economy. Economists expect the US economy grew at an annual pace of 4 percent in the second quarter. A stronger number will benefit the greenback.
Domestically, tomorrow's ANZ business confidence survey will also garner interest given growing concerns that faltering business sentiment could flow into the economy. The main focus will be on respondents’ expectations of own-activity, employment and investment. If those slip into negative territory the kiwi will likely fall.
The local currency rallied "but is now in a holding pattern," said Tim Kelleher, head of institutional foreign exchange sales at ASB Bank. It is "sitting right around resistance. The US GDP might give it a push either way ... and the ANZ business confidence will a big one," he said.
Reserve Bank governor Adrian Orr is due to speak to financial services professionals this evening in an off-the-record speech.
The kiwi rose to 91.32 Australian cents from 91.19 cents yesterday and gained to 4.5693 Chinese yuan from 4.5548 yuan. It advanced to 74.62 yen from 74.29 yen yesterday and traded at 57.36 euro cents from 57.26 cents. The local currency increased to 52.10 British pence from 51.92 pence yesterday.
New Zealand's two-year swap rate rose 1 basis point to 2.03 percent and 10-year swaps eased 1 basis point to 2.87.
No comments yet
MYOB adds 57% more subscribers in 2018 but total online customers still lag Xero's
Investors fear chilling effect as former IRD boss opposes capital gains proposals
Stuff 1H earnings slide but Nine still optimistic of finding buyer
NZ Post achieves first-half revenue growth for the first time since 2015
TeamTalk affirms annual earnings guidance as rising costs dent first-half profit
Government to step up efforts as second Queensland fruit fly detected
Spark's Moutter bangs drum for 5G spectrum auction
F&P Healthcare and ResMed drop patent infringement disputes
NZ dollar dips after Fed minutes not as dovish as expected
February 21st Morning Report