NZ dollar dips on signs interim US-China trade deal may be delayed

Thursday 7th November 2019

The New Zealand dollar dipped on news that an interim trade deal between the US and China might be delayed until December.

The kiwi was trading at 63.66 US cents at 8am versus 63.72 cents at 5pm in Wellington. It touched an overnight high of 63.89 cents. The trade-weighted index was unchanged at 70.17.

The mood soured after a senior official of the US President Donald Trump's administration told Reuters a meeting planned with Chinese President Xi Jinping to sign a long-awaited interim trade deal could be delayed until December as discussions continue over terms and venue.

“The much-hyped phase one deal signing between the world’s two largest economies that was just around the corner, might be around a few more corners,” said Kiwibank senior FX trader Mike Shirley.

“It was enough to send the kiwi back toward session lows,” he said.

According to Reuters, dozens of venues have been suggested for the meeting, which had originally been scheduled to take place on the sidelines of a now-canceled mid-November summit of Asia-Pacific leaders in Chile, the official said.

Today, investors will focus on Australian trade data but the main event will be next week’s domestic monetary policy review with “markets still split on the odds of a cut,” said ANZ FX/rates strategist Sandeep Parekh. ANZ Bank is expecting a 25 basis point rate cut to 0.75 percent.

“Expect global events to drive the kiwi until then,” he said.

The kiwi was trading at 92.54 Australian cents from 92.39, at 49.55 British pence from 49.46, at 57.51 euro cents from 57.52, at 69.33 yen from 69.48 and at 4.4549 Chinese yuan from 4.4597.

(BusinessDesk)

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