Wednesday 18th September 2019
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The New Zealand dollar was a little weaker as the market took bets that June-quarter GDP data out tomorrow will be on the weaker side of expectations.
The kiwi was trading at 63.36 US cents at 5pm in Wellington from 63.56 at 7:55am. The trade-weighted index was at 70.34 points from 70.50.
Economists are forecasting the economy grew at a pace between a 0.3 and 0.6 percent in the quarter, compared with the Reserve Bank's 0.5 percent forecast.
At the median prediction of 0.4 percent growth in the quarter, that would take annual growth to 2 percent, down from 2.5 percent in the March quarter.
"The market has been toying with the GDP data tomorrow – most participants think it's going to be a lower number, proving that we're slowing down a bit as a result of this trade war," says Martin Rudings, a dealer at OMF.
The trade-war between the United States and China, New Zealand's largest trading partner, has been widely blamed for contributing to slowing global growth.
The latest developments have seen a thawing in relations, with concessions being offered by both sides ahead of the first face-to-face negotiations since May. Talks are set to resume in early October.
Before the domestic GDP figures, the US Federal Reserve will be delivering its latest decision on monetary policy.
"Personally, I think they will deliver a quarter percent cut – that might disappoint some people," Rudings says.
But with the unsettled situation following the attacks on Saudi Arabia's oil production facilities last weekend, "it's safer to hold US dollars" so that will probably continue to support the greenback, he says.
The New Zealand dollar was at 92.52 Australian cents from 92.56, at 50.74 British pence from 50.83, at 57.24 euro cents from 57.40, at 68.54 yen from 68.74 and at 4.4895 Chinese yuan from 4.5067.
The two-year swap rate eased to a bid price of 0.9825 percent from 0.9799 yesterday while 10-year swaps fell to 1.3250 percent from 1.3350.
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