Wednesday 28th August 2019
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The New Zealand dollar fell amid continuing negative sentiment over the US-China trade war and possibly on corporate flows, although dealers were mystified what they could be.
The kiwi was trading at 63.34 US cents at 5:05pm in Wellington, just above the day’s low at 63.22 cents, its lowest level since January 2016, and from 63.64 cents at 7:55am. The trade-weighted index was at 70.76 from 71.03.
Sentiment is already nervous and uncertain in reaction to the escalating tensions between the US and China over trade and because of US President Donald Trump’s constant tweeting and frequent contradictions.
“The behaviour this afternoon clearly specifically relates to the New Zealand dollar," says Peter Cavanaugh, the senior client advisor at Bancorp Treasury Services. "In the prevailing post-G7 and Trump-tweeting environment, the markets can be easily moved by a transaction that would normally only rate a blip on the radar.”
Tim Kelleher, head of foreign exchange sales at Commonwealth Bank of Australia, says the kiwi has been under constant pressure for several days.
“Consistently, we’re seeing buying of Aussie and selling of kiwi. It just keeps on drifting off.”
Some of Trump’s contradictions appear particularly inane such as saying senior Chinese officials had called US officials on the weekend requesting renewed talks while China said it knows nothing of such calls.
The New Zealand dollar was at 93.95 Australian cents from 94.18 cents, at 51.58 British pence from 51.76, at 57.12 euro cents from 57.37, at 67.02 yen from 67.27 and at 4.5324 Chinese yuan from 4.5554.
The New Zealand two-year swap rate edged down to a bid price of 0.9281 percent from yesterday’s close at 0.9432. The 10-year swap rate fell to 1.2050 percent from 1.2175.
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