Sharechat Logo

NZ dollar weaker as investors fret about China slowdown

Tuesday 24th July 2018

Text too small?

The New Zealand dollar was slightly weaker against the greenback as the ongoing devaluation in China's yuan added to concerns about a slowdown in the world's second-largest economy.

The kiwi traded at 67.73 US cents at 5pm in Wellington versus 67.82 US cents at 8am in Wellington from 68.14 cents yesterday. The trade-weighted index was at 73.00 from 73.10 yesterday.

The People's Bank of China set the dollar's midpoint for daily trading at CNY6.7891, compared with CNY6.7593 yesterday, a fresh one-year low. The PBoC has been setting the yuan's reference rate lower and providing greater support to lenders. While the moves have been seen a means to limit the fall-out from a trade war with the US, they have also sparked concern about the slowdown in the Chinese economy. 

Given that China is New Zealand's largest trading partner "the yuan fix is having a sizeable impact. The fix is lower and the kiwi moves lower" against the US dollar, said Ross Weston, a senior trader at Kiwibank. "It has gradually ground down throughout the day," he said. 

The kiwi traded at 4.6128 Chinese yuan from 4.6053 yuan yesterday.

Looking ahead, he said that tomorrow's Australian consumer price inflation data will be closely watched. If annual inflation is higher than the median 2.2 percent in a Bloomberg poll of 26 economists, the kiwi will likely take a tumble against the Aussie, said Weston. 

The kiwi traded at 91.82 Australian cents from 91.77 cents yesterday.

It was at 75.38 yen from 75.60 yen yesterday as speculation continued that Japan's central bank may review the framework controlling its yield curve to make it more sustainable. 

It was at 57.97 euro cents from 58.08 cents yesterday and edged down to 51.73 British pence from 51.84 pence.

New Zealand's two-year swap rate was unchanged at 2.13 percent and 10-year swaps rose 0.5 basis points to 3.05 percent.

(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:

Hallenstein Glasson wary of margin squeeze in second half
Sydney house price downturn could dampen Auckland prices
RBNZ governor denies central bank exerted influence over CBLI creditors
December 12th Morning Report
Britain's Apax wins over Trade Me, matching rival $2.56B offer
NZ dollar holds near 15-month high vs pound as Brexit woes threaten May's leadership
MARKET CLOSE: NZ shares gain as defensive stocks find favour; Contact, Meridian rise
NZ dollar firm against greenback as risk appetite ticks up
Cleantech start-up Mint Innovation raises $5.2M to prepare for commercial deployment
BurgerFuel starts full strategic review of business

IRG See IRG research reports