Sharechat Logo

NZ dollar gains on improving US-EU trade relations

Thursday 26th July 2018

Text too small?

The New Zealand dollar held overnight gains against the greenback, buoyed by news the US and European Union agreed to work toward zero tariffs, easing fears of a global trade war.

The kiwi traded at 68.37 US cents as at 5pm in Wellington versus 68.34 cents at 8.15am, and up from 67.90 cents yesterday. The trade-weighted index was 73.27 from 73.04 yesterday.

In a joint statement, following EU President Jean-Claude Juncker's visit to the White House, he and US President Donald Trump said they had agreed to "work together toward zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods." The two also said "we want to resolve the steel and aluminum tariff issues and retaliatory tariffs." Among other things, the two will immediately create an "Executive Working Group of our closest advisors to carry this joint agenda forward."

Fears of a deepening global trade rift had weighed on the kiwi in recent weeks and Imre Speizer, head of NZ strategy at Westpac Banking Corp, said it gained overnight on expectations surrounding the meeting and then "the news that came out probably surpassed those expectations and it (the kiwi) had a good run as a result of that."

Speizer said the European Central Bank’s policy decision due later on Thursday was unlikely to garner much interest as it is expected to repeat the message that bond purchases will start tapering by year end with no hikes until the European summer next year. 

He said the main event will be second quarter US gross domestic product due Friday. Economists expect 4.3 percent growth, according to MarketWatch, which would be the fastest since the third quarter of 2014. If it tops 5.2 percent as some are forecasting, it would be the strongest since the third quarter of 2003. 

The kiwi traded at 58.28 euro cents from 58.13 cents yesterday and edged up to 51.78 British pence from 51.65 pence. It rose to 75.75 yen from 75.53 yen yesterday and gained to 4.6276 Chinese yuan from 4.6148 yuan.

New Zealand's two-year swap rate was unchanged at 2.12 percent and 10-year swaps were unchanged at 3.04 percent.


  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:

MARKET CLOSE: NZ shares gain as Trade Me hits record on takeover
NZ dollar higher against USD as jitters about China-US trade tensions recede
Rakon boosts bank funding to meet increased telco demand
Underfunded Overseer farm management tool needs thorough review: Upton
Motor vehicle lending helps UDC lift annual profit 6%
Orr says RBNZ still under-resourced, funding model part of second phase of review
Leading business brokerage firm LINK raises a further NZ$3.45m in capital
Travel insurance and the AirNZ strike
Industrial heat a challenge for cost-effective emissions reduction
Hallenstein Glasson wary of margin squeeze in second half

IRG See IRG research reports