Sharechat Logo

NZ dollar whipped around as China retaliates to stiffer tariffs, US jobs disappoint

Monday 6th August 2018

Text too small?

The New Zealand dollar was largely unchanged after getting whipped around by China's response to stiffer US tariffs and after American jobs growth was weaker than expected. 

The kiwi traded at 67.39 US cents as at 8am in Wellington from 67.41 cents on Friday in New York and 67.32 cents in Asia last week. The trade-weighted index was almost unchanged at 72.69 from 72.67 last week. 

The local currency climbed almost half a US cent on Friday night after US non-farm payrolls showed 157,000 jobs were added in July, fewer than the 193,000 economists expected, although earlier months were revised higher and hourly wage growth remained unchanged. Those gains were short-lived after China's State Council announced US$60 billion of US goods that will face tariffs as the tit-for-tat trade war with US President Donald Trump continues. China is New Zealand's biggest trading partner and the heightened trade tensions have weighed on the kiwi dollar.

"US-China trade tensions are at the heart of the poor NZD performance," Bank of New Zealand senior markets strategist Jason Wong said in a note. "Imposition of Trump’s tariff plan in early September would see the NZD reaching fresh lows, while a back-off would likely see a relief rally."

Local data today include the ANZ commodity price index. Central bank meetings in Australia tomorrow and domestically on Thursday are on the radar.

The kiwi declined to 4.6033 Chinese yuan from 4.6054 yuan after the People's Bank of China reintroduced a 20 percent reserve requirement for foreign exchange forwards. That makes it more expensive for traders to take a short position on the yuan, predicting the currency will depreciate and can be bought back at a cheaper price. 

The kiwi increased to 91.07 Australian cents from 90.92 cents last week and traded at 74.94 yen from 75 yen. It was almost unchanged at 58.23 euro cents from 58.24 cents and traded at 51.80 British pence from 51.81 pence. 


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
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:

Steel & Tube turnaround continues with 49% jump in first-half net profit
February 18th Morning Report
FIRST CUT: Port of Tauranga lifts 1H profit 4%
NZ dollar starts the week with a tailwind as positive US-China trade talks boost sentiment
Tax Working Group's capital gains proposal keenly awaited
MARKET CLOSE: NZ shares dip as global trade jitters weigh on A2, F&P
NZ dollar set for weekly gain after Reserve Bank surprise
Burger Fuel exploring sale after review questions listing merits
New net migration data to remain rubbery for quite some time
NZX to push sales this year after reshaping business dents 2018 profit

IRG See IRG research reports