Monday 21st May 2018
|Text too small?|
The New Zealand dollar gained as fears over a trade war between the US and China cooled after the world's two-biggest economies made headway in negotiations to avert tit-for-tat trade barriers.
The kiwi rose to 69.26 US cents as at 8am in Wellington from 69.10 cents on Friday in New York and 68.84 cents in Asia last week. The trade-weighted index increased to 72.68 from 72.58.
US Treasury Secretary Steve Mnuchin told Fox news the trade war is on hold and the US won't impose harsh tariffs on China while negotiations are ongoing after receiving commitments from Asia's biggest economy for meaningful increases to agricultural and energy imports. The measures aim to reduce the US's US$200 billion trade deficit with China, a key goal for President Donald Trump. The threat of a trade war between the world's two biggest economies has weighed on trade-based economies such as New Zealand and Australia.
"It seems for now that common sense is prevailing and the risk of a major trade war has subsided," Bank of New Zealand senior markets strategist Jason Wong said in a note. "Currency markets were quiet but a notable outperformance of the NZD prevailed."
Wong said the kiwi looked "oversold" below 69 US cents "after a big positioning shakeout" and that speculative positions on the currency were "close to square". He said global events will continue to drive the local currency, which has been under pressure as building inflationary pressures have pushed up the yield on US 10-year Treasuries.
Local data today include first-quarter retail sales which are expected to show upbeat consumer spending, and April travel and migration figures.
The kiwi rose to 92.04 Australian cents from 91.72 cents on Friday in New York and gained to 4.4121 Chinese yuan from 4.4025 yuan. It gained to 76.71 yen from 76.52 yen last week and traded at 58.76 euro cents from 58.69 cents. The kiwi increased to 51.34 British pence from 51.24 pence last week.
No comments yet
Gold Report 21st May 2019
NZ dollar falls after RBA governor flags potential rate cut
ASB reviews ownership of Aegis
Auckland Airport kicks off next phase of expansion
Cashed-up Plexure eyes acquisitions to accelerate growth as loss shrinks
Tower turns to 1H profit, lifts FY guidance
IRD should have doubled claim against Watson's Cullen Group - Professor
Investore FY profit falls 16% on smaller valuation gain, signals flat dividend for 2020
Synlait receives cease and desist letter regarding Pokeno plant
21st May 2019 Morning Report