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NZ dollar hovers below 63 US cents on trade war jitters

Monday 2nd September 2019

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The New Zealand dollar hovered just below 63 US cents after the US and China imposed previously announced additional tariffs on Sunday, adding to fears a resolution is not on the immediate horizon.

The kiwi was trading at 62.93 US cents at 7:55 am in Wellington versus 63.06 US cents late Friday in New York. It touched a low of 62.81 cents overnight Friday, the lowest since September 2015. The trade-weighted index was at 70.44 versus 70.54 Friday. 

The US imposed a 15 percent tariff on US$110 billion of Chinese imports and is slated to add them on another US$160 billion of goods on Dec. 15. China will impose tariffs on US$75 billion of imports between September and December.

The ongoing tensions between the two nations have roiled markets and fuelled anxiety about a global slowdown.

“Trade teams continue to talk and will meet later this month, but the recent escalation in trade tensions suggests that global uncertainty is unlikely to be resolved any time soon,” said ANZ economist Michael Callaghan.

The kiwi was likely also weighed by news China’s manufacturing purchasing managers’ index, released by the National Bureau of Statistics on Saturday, was 49.5 in August versus 49.7 in July, slightly below analysts’ expectations.

A breakdown of the data showed manufacturing production expanded, but market demand moderated amid a complex economic environment, Xinhau quoted NBS senior statistician Zhao Qinghe as saying.

Investors will be watching for domestic overseas trade index data today but the main event will be the US jobs data later in the week. 

The kiwi was at 4.5022 Chinese yuan from 4.5029 yuan and fell to 66.71 yen from 66.90 yen. It traded at 93.69 Australian cents from 93.63 cents and was unchanged at 57.24 euro cents. The local currency traded at 51.83 British pence from 51.80 pence.

(BusinessDesk)

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