Sharechat Logo

NZ dollar gains as China holds off retaliating against latest US tariffs

Friday 13th July 2018

Text too small?

The New Zealand dollar recovery extended through Northern Hemisphere trading as China refrained from retaliating immediately to the latest round of US tariffs, set to hit US$200 billion of the Asian powerhouse's exports to the world's biggest economy.

The kiwi rose to 67.74 US cents as at 8.30am in Wellington from 67.60 cents yesterday, having hit a week-low on fears the US-Sino trade war will rock open trading nations such as New Zealand. The trade-weighted index edged up to 72.57 from 72.45. 

The threat of an escalating trade war weighed heavily on prices for raw materials and emerging market assets and the CRB commodity index - a measure of 19 commonly traded commodities - gained 0.6 percent after China's Ministry of Commerce said it was trying to avoid escalating the trade dispute. Meanwhile, US Treasury Secretary Steven Mnuchin said Washington was open to negotiations if China adopted structural change. 

"Markets found some relief overnight on a lack of trade escalation and perceptions that China is taking a slightly more conciliatory tone," ANZ Bank New Zealand economists Liz Kendall and Philip Borkin said in a note. "However, it was hardly a convincing bounce (for the kiwi), with the NZD still looking a little tenuous here."

The greenback was also weighed on by weaker than expected US inflation at 0.1 percent in June. Rising US consumer prices and a strong labour market have prompted the Federal Reserve to continue its path to higher interest rates, which have bolstered demand for the greenback with a more attractive yield. 

Local data today include the Business NZ-BNZ performance of manufacturing index, which has continued to show robust industrial production. 

The kiwi dollar gained to 76.24 yen from 75.78 yen yesterday and traded at 91.47 Australian cents from 91.53 cents. It increased to 51.30 British pence from 51.14 pence and gained to 58.05 euro cents from 57.82 cents. The local currency declined to 4.5158 Chinese yuan from  4.5182 yuan yesterday.

(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:

Serko first-half profit drops 16% as R&D, expansion costs mount
A2 Milk says strong growth continued in first 4 months of FY19
Argosy expects to find more damage at NZ Post House
Steel & Tube, ComCom appeal record mesh fine
Fletcher Building shares drop on weaker earnings forecast
November 20th Morning Report
NZ dollar slips as US-China trade tensions persist
Spark sets 5G launch date, but without any 5G spectrum
MARKET CLOSE: NZ shares dip as trade war fears linger
NZ dollar still firm against USD but gains capped by waning risk appetite

IRG See IRG research reports