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NZ dollar weighed by tensions in Hong Kong, political turmoil in Argentina

Tuesday 13th August 2019

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The New Zealand dollar fell as global risk appetite was dented by escalating tensions in Hong Kong and political ructions in Argentina.

The kiwi was trading at 64.46 US cents at 8am versus 64.69 US cents at 5:05pm in Wellington. The trade-weighted index was at 71.71 points from 71.88 points.

“Risk-off was the central theme of the overnight session,” said Kiwibank trader Mike Shirley, who pointed to ongoing protests in Hong Kong and political disruption in Argentina.

The Argentine peso tumbled as a centre-left candidate won an election primary as investors were spooked. According to The Guardian it fell 30 percent against the US dollar and then recovered to be around 15 percent lower.

Analysts quoted by The Guardian said the prospect of a populist left-leaning government could raise the chances of the country defaulting on its debt.

In Asia, meanwhile, ongoing protests in Hong Kong also made markets nervous with flights cancelled in and out of the country. According to CNN, Hong Kong handles around 1,100 flights daily across about 200 destinations.

“Hong Kong tensions took the limelight from trade tensions overnight, with a risk-off tone to markets as protestors in Hong Kong managed to close the airport to most flights, prompting Beijing to describe the protest actions as “terrorism,”’ said ANZ FX/Rates strategist Sandeep Parekh.

Today, investors will be watching for domestic housing data from the Real Estate Institute as well as any signs of inflation in the food price index.

The New Zealand dollar was trading at 95.42 Australian cents from 95.27, at 53.36 British pence from 53.72, at 57.49 euro cents from 57.69, at 67.89  yen from 68.17,  and at 4.5488 yuan from 4.5678.

(BusinessDesk)

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