Sharechat Logo

NZ dollar rises as US-China trade negotiations dominate

Thursday 10th October 2019

Text too small?

The New Zealand dollar firmed slightly after being batted hither and yon by news reports emanating from the China-US trade negotiations.

The kiwi was trading at 63.14 US cents at 5pm in Wellington from 62.94 cents at 8am. The trade-weighted index was at 70.43 points from 70.30.

Earlier today, the domestic currency fell in tandem with the Australian dollar after China's yuan fell on a South China Morning Post report that the negotiations aren't going well and that the Chinese delegation refuses to talk about forced technology transfers, a core US grievance in the negotiations.

It also repeated suggestions circulating yesterday that the two days of talks, scheduled for Thursday and Friday, will be cut short.

But Bloomberg then reported that the US is considering a currency pact with China as part of a deal including the suspension of planned tariff hikes. It may also allow US companies to deal with Huawei, news that saw the Chinese yuan rally and drag the NZ and Australian dollars up with it.

The kiwi was trading at 4.4914 Chinese yuan from 4.5865.

"Taking a step back, the moves have happened within a relatively narrow range, but they have been very quick, almost instantaneous," says Peter Cavanaugh, the senior advisor at Bancorp Treasury Services.

That's a measure of how nervous the market is about the outcome of the talks.

"Everyone from central bankers down to bank economists are pointing to the global risks headed by the China-US trade talks," Cavanaugh says.

Even the Federal Reserve, in the minutes released early today from its September meeting when it last cut interest rates, has the talks top-of-mind.

"They just said trade tensions – Jerome Powell is too polite to play President Trump's blame game."

President Donald Trump has been lambasting Powell, the Fed governor, criticising him most of this year in multiple tweets for not cutting rates more severely.

The New Zealand dollar was trading at 93.55 Australian cents from 93.50, 67.85 yen from 67.64, at 51.62 British pence from 51.51 and at 57.45 euro cents from 57.32.

The two-year swap rate edged up to a bid price of 0.8412 percent from 0.8229 yesterday while the 10-year swaps rose to 1.1300 percent from 1.1125.

(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:

NZ dollar stalls amid doubts on US-China trade deal
Tourist numbers perk up in August as Aussies more than offset declining Asian demand
Peters to unions: strikes not helpful; no word on Fair Pay Agreements
Oil and gas critical to global emissions reduction effort - BP
Ebos pays A$34m for medical devices businesses
House price inflation ticks higher as sales volumes recover
Fletcher in $31 mln dispute with ministry over Greymouth hospital
NZ dollar eases as markets fret about US-China trade talks
15th October 2019 Morning Report
CTU pressures govt for Fair Pay Agreements

IRG See IRG research reports