Sharechat Logo

NZ dollar firms on signs US-China trade talks moving forward

Wednesday 19th June 2019

Text too small?

The New Zealand dollar got a lift from improving sentiment around US-China trade talks after President Donald Trump confirmed the two nations' leaders will meet in Japan at the end of the month. 

The kiwi was trading at 65.25 at 7:45 am in Wellington versus 64.93 US cent at 5pm in Wellington. The trade-weighted index was at 71.86 from 71.69.

Markets were cheered when Trump tweeted he had a "very good" telephone conversation with President Xi Jinping and said "we will be having an extended meeting next week at the G-20 in Japan. Our respective teams will begin talks prior to our meeting." China confirmed the meeting. The G-20 will take place in Osaka from June 28-29. 

"News of fresh talks between the US and China saw the kiwi swept up in optimism," said ANZ Bank FX/rates strategist Sandeep Parekh. 

The kiwi was trading at 58.26 euro cents from 57.78 after a dovish speech from ECB President Mario Draghi in which he said “further cuts in policy interest rates and mitigating measures to contain any side effects remain part of our tools. And the asset purchase programme still has considerable headroom.”

Gains in the kiwi, however, were capped by a 3.8 percent fall in the GDT index in the overnight Global Dairy Trade auction. Whole milk powder fell 4.3 percent to US$3,006 a metric tonne.

“This is the sixth consecutive decrease in the whole milk powder price index, with price levels decreasing significantly across all contracts,” NZX dairy analyst Robert Gibson said. Softer prices likely reflected the lift in volume being offered compared with the previous event, he said.

Investors will now be watching for New Zealand's first-quarter current account data due at 10:45 am.

The main focus, however, is on the US Federal Reserve ahead of tomorrow's policy announcement and statement, which will be closely scrutinised for any clues about when it might move to cut interest rates. 

The New Zealand dollar was trading at 94.90 Australian cents from 94.93 late yesterday, at 51.93 British pence from 51.81, at 70.74 yen from 70.33, and at 4.5024 Chinese yuan from 4.4972.


NOTE: please be advised to read full articles from Business Desk Website, you will have to pay a subscription fee on their website.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
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:

NZ dollar consolidates weekly gain of more than a US cent
NZ dollar holds gains on improved dairy, bank capital outlook
MARKET CLOSE: NZ shares gain; banks rally on Reserve Bank capital decision
NZ dollar rises; bank capital rules less harsh than expected
RBNZ relaxes capital requirements, allows preference shares, extends phase-in
NZ dollar extends gain amid mixed US data, possible trade progress
MARKET CLOSE: NZ shares dip on eve of major regulatory decisions
NZ dollar sees off global headwinds, holds above 65 US cents
NZ dollar holds above 65 US cents; dairy auction prices mixed
Dairy index falls on weaker butter, milk fat demand

IRG See IRG research reports