Sharechat Logo

NZ dollar firm as trade tensions ease, US data improves

Friday 6th September 2019

Text too small?

The New Zealand dollar remains firm on global optimism that the US and China might reach a trade deal and after better-than-expected US data overnight.

The kiwi was trading at 63.76 US cents at 7:55 am in Wellington from 63.71 cents at 5pm. The trade-weighted index was at 71.03 from 70.96.

Risk appetite improved yesterday when China and the US agreed to hold high-level talks in October in Washington. It got a further boost when the Institute for Supply Management said its non-manufacturing activity index increased to a reading of 56.4 in August from 53.7 in July.  Economists polled by Reuters had expected a lift to 54.0.

According to ISM, survey respondents "remain concerned about tariffs and geopolitical uncertainty; however, they are mostly positive about business conditions.”

The ADP National Employment Report also showed private payrolls lifting by 195,000 jobs in August after rising by 142,000 in July.

News of the trade talks “was the spark that started the risk-on fire, a fire that was subsequently fueled by some better-than-expected US data overnight,” Kiwibank trader Mike Shirley said.

The ADP data suggests a solid non-farm payrolls report tonight, said ANZ Bank. The median expectation is that the US economy added 160,000 jobs last month. 

"Without a downturn in private service sector jobs in the US, history shows that a recession is very unlikely," ANZ FX/rates strategist Sandeep Parekh said. 

US Federal Reserve chairman Jerome Powell is also scheduled to speak Friday in Zurich on the “Economic Outlook and Monetary Policy.”

The speech will be closely watched as it is the final policy guidance before the Fed goes into blackout ahead of its mid-September meeting, Parekh said. ANZ is forecasting a 25 basis-point Fed cut this month and another before year-end.

The New Zealand dollar was trading at 93.47 Australian cents from 93.48, at 51.70 British pence from 52.05, at 57.75 euro cents from 57.77, at 68.22 yen from 67.88 and at 4.5568 Chinese yuan from 4.5449. 

(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:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report