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NZD weaker on stronger-than-expected US data, geopolitical worries

Friday 1st March 2019

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The New Zealand dollar fell after stronger-than-expected fourth quarter economic growth in the US gave the greenback a lift. Ongoing US-China trade uncertainty and heightened geopolitical tensions also weighed on sentiment. 

The kiwi was trading at 68.07 US cents at 8 am in Wellington from  68.48 US cents at 5 pm. The trade-weighted index was at 73.63 points from 73.91.

Data from the Commerce Department showed the US economy slowed less than expected in the fourth quarter amid solid consumer and business spending. The strong data, however, was tempered by news a second summit between President Donald Trump and North Korea leader Kim Jong Un collapsed on Thursday over sanctions on Pyongyang. Investors also remain concerned about whether the US and China can reach a deal. 

"Stronger-than-expected US GDP wasn’t enough to stop ongoing US-China trade uncertainty and heightened geopolitical tensions from weighing on risk," said ANZ FX/Rates strategist Sandeep Parekh,

Parekh also said that mixed domestic data is weighing on the kiwi. Yesterday, ANZ Bank’s headline business confidence index sank 7 points in the latest month with a net 31 percent of respondents expecting general business conditions to deteriorate in the year ahead.

"Today's terms of trade and consumer confidence releases will bring a new test for the kiwi," he said. 

The New Zealand dollar was trading at 95.93 Australian cents from 95.82, at 75.77 yen from 75.91, at 51.30 British pence from 51.49, at 59.82 euro cents from 60.16 and 4.5534 Chinese yuan from 4.5757.

(BusinessDesk)



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