Monday 25th June 2018
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The New Zealand dollar was slightly weaker against the greenback as investors awaited any more news on the trade front as well as this week's cash rate decision from New Zealand's central bank.
The kiwi traded at 69.01 US cents as at 5pm in Wellington from 69.13 US cents as at 8am and 69.06 cents on Friday in New York. The trade-weighted index was at 73.36 from 73.29 last week.
While the kiwi managed to hold above 69 US cents, any gains were capped by ongoing worries about the future of global trade as the US and its trading partners continue to step up their rhetoric. According to Bloomberg, Jyrki Katainen, the EU commissioner in charge of jobs and growth, told the French newspaper Le Monde over the weekend that if US President Donald Trump applies new tariffs to European cars the EU "would have no choice but to react."
Any lift in the New Zealand dollar was also held back as traders await direction from this week's official cash rate decision by the New Zealand central bank. Economists are expecting it to keep rates on hold at a record low 1.75 percent but the statement will be closely scrutinised by any clues of future direction.
"In a typical Monday where there is not a lot of data, we have run out of puff," said ANZ Senior Economist Phil Borkin. "We are waiting for direction from either offshore or the RBNZ later in the week," he said.
"It's a headline-driven market at the moment," he said. On the reserve bank, Borkin said it will be interesting to see if they tweak any language around the economy at the moment, in particular after the first quarter gross domestic product data undershot the central bank's expectations last week.
The economy grew 0.5 percent on quarter in the first quarter, below the 0.7 percent tipped by the central bank.
The kiwi rose to 4.5080 Chinese yuan from 4.4888 yuan last week
The local currency traded at 75.54 yen from 75.93 yen last week and rose to 92.92 Australian cents from 92.72 cents. It edged up to 52.21 British pence from 52.02 pence last week and was unchanged at 59.21 cents.
New Zealand's two-year swap rate was unchanged at 2.24 percent and 10-year swaps fell 1 basis point to 3.10 percent.
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