NZ dollar range-bound as US-China trade tensions continue

The New Zealand dollar is range-bound as trade tensions continue to drive sentiment.

The kiwi was trading at 64.65 US cents at 7:50 am in Wellington unchanged from 64.65 cents Friday in New York. It was at 64.88 US cents at 5pm in Wellington Friday. The trade-weighted index was at 71.86 points from 71.87.

Markets remained jittery after US President Donald Trump warned that the September round of talks between the US and China might not take place. Trump added to market fears when he said the United States would not do business with Chinese telecoms giant Huawei Technologies.

“We are not going to do business with Huawei. ... And I really made the decision. It’s much simpler not doing any business with Huawei. ... That doesn’t mean we won’t agree to something if and when we make a trade deal,” Trump said, according to CNBC. 

The Commerce Department, however, later clarified Trump’s comments only refer to the ban on the US government buying from Huawei.

Markets remain “very sensitive to reports on the US-China trade relationship,” said ANZ FX/rates strategist Sandeep Parekh.

The kiwi traded at 53.56 British pence from 53.66 in New York on Friday and 53.47 British pence in Wellington. The pound is under pressure after news the UK economy contracted 0.2 percent in the second quarter, stoking fears of a technical recession.

“The negative print adds to recession fears in an environment where Brexit uncertainty continues to dampen activity, and the 31 October deadline is looming,” said Parekh.

The New Zealand dollar was trading at 95.28 Australian cents from 95.15, at, at 57.74 euro cents from 57.67, at 68.29 yen from 68.67 yen and at 4.5651 yuan from 4.5623.

(BusinessDesk)

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