Wednesday 9th January 2019
|Text too small?|
The New Zealand dollar weakened against the US dollar amid signs of progress at US-China trade talks in Beijing.
The kiwi was trading at 67.22 US cents at 8:30am compared with 67.44 cents late yesterday. The trade-weighted index fell to 73.03 from 73.31.
“I think the markets are getting a bit more optimistic about those trade talks,” said Mark Johnson, private client manager at OMF.
Gains on equity markets overnight also reflected that “risk appetite has stayed positive” this week, he said.
Talks in Beijing between US and Chinese trade officials have been extended to a third day with both sides citing good progress.
Still, the risks of a further slowdown in the global economy remain real. Data overnight showed that German industrial production was weaker than expected in November – down 1.9 percent from October and 4.7 percent less than a year earlier.
Late yesterday, Korean tech giant Samsung Electronics cited poor sales in China for a 29 percent fall in December quarter profit.
OMF’s Johnson said the kiwi – which fell as low as 67.09 US cents overnight – is “still in a bit of a range” with resistance at 67.50 cents and initial support at 66.31 cents.
Given the dearth of local economic data, the next big focus for investors will be the release of minutes from the Federal Open Market Committee’s December meeting later today in the US.
Johnson said that material should help explain what has underpinned the change in the Fed’s thinking about interest rate rises this year. Markets jumped on Friday after Fed chair Jerome Powell reassured markets the central bank will be patient when considering further increases.
“Powell is really the one who has effectively told the market that rates are on hold.”
Risks of a no-deal Brexit may also be increasing, Johnson said. The European Union appear to be keen to help UK Prime Minister Theresa May, but that doesn’t extend as far as re-working the Brexit deal.
“There’s got to be a better than even chance that we will have a ‘no-deal’ Brexit,” Johnson said. “Their divorce date is getting so close now.”
Earlier this morning, May faced a humiliating defeat when Conservative and Labour MPs flexed their muscle in parliament - voting 303 to 296 in favour of an amendment curbing some government tax administrative powers in the event of no deal.
The kiwi dollar fell to 94.09 Australian cents from 94.61 cents late yesterday. It was little changed at 52.86 British pence, from 52.85 pence, and fell to 58.73 euro cents from 58.95. It fell to 73.02 Japanese yen, from 73.41 yen, and to 4.6052 Chinese yuan from 4.6229 yuan late yesterday.
No comments yet
NZ dollar stalled; US-China trade deal may be postponed
AFT Pharmaceuticals starts to hit its straps
Crown seeks US$100m from Tui operator; Prospector moving on
Pacific Edge goes back to shareholders for another $20m
Crown seeks $100m from Tui operator Tamarind
Ryman underlying annual profit may rise by up to 17%
NZ dollar eases on increasing US-China doubts, lack of news in Fed minutes
From dog tucker to top dog: economists ask how Northport can be Auckland’s best replacement
MARKET CLOSE: NZ shares rise; Metlife jumps on takeover talk
NZ dollar eases on technical factors, buoyed by higher dairy prices