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NZ dollar gets lift from news Chinese delegation heading to US for trade talks

Thursday 16th August 2018

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The New Zealand dollar gained against the greenback as markets were cheered by news a Chinese delegation will travel to the United States for talks later this month.

The kiwi traded at 65.83 US cents at 5pm versus 65.63 cents at 8am in Wellington and 65.57 cents yesterday. The trade-weighted index was at 71.65 from 71.58.

China will dispatch Vice Commerce Minister Wang Shouwen to the US for low-level trade talks in late August, Bloomberg reported. Sentiment lifted as it will be the first official exchanges since talks broke down two months ago. Investors have been jittery about potential fallout from a US-China trade war. According to a statement on China's Ministry of Commerce website, the vice commerce minister will meet with a US group led by David Malpass, undersecretary for international affairs at the Department of the Treasury. 

"The delegation going to the US is a positive step," said Martin Rudings, senior foreign exchange dealer at OMF.  

The kiwi lost ground against the Aussie after Australia's jobless rate fell to 5.3 percent in July, from 5.4 percent the prior month. Economists had expected it to be unchanged. The kiwi fell to 90.52 Australian cents from 90.91 cents yesterday.

While the headline number was good, Rudings noted the number of people employed in Australia fell by 3,900, compared with an expected 15,000 rise. 

"It wouldn't prompt me to go and buy Aussie on that," he said. 

The kiwi traded at 4.5379 Chinese yuan from 4.5266 yuan. It increased to 72.91 yen from 72.45 yen yesterday and traded at 57.83 euro cents from 57.90 cents. It was at 51.74 British pence from 51.61 pence yesterday.

New Zealand's two-year swap rate was unchanged at 2.02 percent; the 10-year swap rate was unchanged at 2.87 percent.

(BusinessDesk)

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