Sharechat Logo

NZ dollar hits new 2 1/2 month high as Trump's trade stance weighs on greenback

Wednesday 1st February 2017

Text too small?

The New Zealand dollar rose to a 2 1/2-month high against the greenback as investors grew warier of US President Donald Trump's stance on trade, with Germany accused of using a weak euro to exploit its trading partners and singled out as a hindrance to a trans-Atlantic deal. 

The kiwi rose as high as 73.50 US cents and traded at 73.31 cents as at 8am from 72.86 cents yesterday.The trade-weighted index advanced to 79.89 from 79.64. 

Stocks on Wall Street fell and the US dollar index declined after Peter Navarro, the head of Trump's new National Trade Council, told the Financial Times that Germany used a "grossly undervalued" euro to exploit its European and US trading partners and singled out the nation as an obstacle to the Transatlantic Trade and Investment Partnership. German chancellor Angela Merkel rejected the claims the European nation could influence the euro. Navarro's comments followed an earlier claim by Trump accusing Japan and China of using monetary policy to pursue devaluation in the past to the detriment of US trading interests.

"The USD fell sharply as comments from Peter Navarro and Trump indicated that Washington’s view is that other countries gain advantage over the US by manipulating their exchange rates," ANZ Bank New Zealand senior rates strategist David Croy said in a note. "Against the current 'Trump fatigue' vibe, with local data strong and carry elevated, the risk is we go higher. Frankly, there is little other than generalised USD strength (should it re-emerge) standing in the way of the NZD."

Housing data today showed New Zealand property values continued to rise in January. Investors will be watching local employment figures which are expected to show New Zealand's unemployment rate dipped to 4.8 percent in the final three months of 2016,  strong employment growth and accelerating wage inflation. 

The local currency gained to 96.73 Australian cents from 96.29 cents yesterday and increased to 5.0435 Chinese yuan from 5.0111 yuan. It slipped to 67.95 euro cents from 68.11 cents yesterday and was little changed at 58.30 British pence from 58.24 pence. The kiwi traded at 82.63 yen from 82.73 yen yesterday. 

BusinessDesk.co.nz

  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:

Gold Report 23rd July 2018
MARKET CLOSE: NZ shares down on Trump threats, A2 and Pushpay drop while Kathmandu rises
NZ dollar gains as markets fret about political pressure on the Fed
Tougher NZX disclosure obligations get mixed response in listing rules review
The Warehouse cuts up to 140 jobs in restructure; shares unchanged
Trustpower supports intent of emissions target but calls for careful consideration of impacts
NZ govt to consider imposing mānuka honey export criteria on local market
July 23rd Morning Report
NZ dollar gains as Trump bemoans strong greenback, rising US rates
MARKET CLOSE: NZ shares up, led by Fisher & Paykel Healthcare, Ryman

IRG See IRG research reports