Sharechat Logo

NZ dollar weaker after RBNZ cut; all eyes on US-China talks

Thursday 9th May 2019

Text too small?

The New Zealand dollar was weaker after the domestic central bank cut rates to a record low 1.50 percent and as markets await news on the latest US-China trade talks.

The kiwi was trading at 65.73 US cents at 7:45am in Wellington versus 65.89 US cents at 5pm.  The trade-weighted index eased to 71.87 from 71.90. 

The kiwi took a tumble when the central bank cut the rate and rejigged its forecasts to show another cut is possible. Most economists are forecasting another cut this year and markets have a cut fully priced-in by March next year.

However, central bank governor Adrian Orr stopped short of "promising further aggressive action" and the kiwi recovered as markets judged his tone to be fairly neutral, ANZ Bank senior economist Miles Workman said. ANZ is expecting two more rate cuts, one by November and one in February. 

Orr is due to appear this morning before a parliamentary committee and may offer more clues as to what the bank's next move might be. 

However, "US-China headlines continue to dominate" with talks due to resume later in the global trading day in Washington, said Mike Shirley, a dealer at Kiwibank.

Markets were jittery after US President Donald Trump tweeted he would be happy to keep tariffs on Chinese imports and China warned it would retaliate.  

China backtracked late last week on almost all aspects of a draft trade agreement, threatening to blow up the negotiations, Reuters reported earlier in the day, citing US government and private-sector sources.

The domestic currency was trading at 94.02 Australian cents from 93.79, at 50.53 British pence from 50.38, at 58.70 euro cents from 58.78, at 72.35 Japanese yen from 72.44, and at 4.4577 Chinese yuan from 4.4602.

(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:

MARKET CLOSE: NZ shares rise; trading quiet ahead of upcoming earnings
NZ dollar firms against the Aussie heading into federal election
Fletcher-commissioned Deloitte report shows building material costs are low
RBNZ censures ANZ, prescribes risk capital calculation
RBNZ censures ANZ, prescribes risk capital calculation
SeaDragon shareholders back $4M injection to stave off liquidation
SeaDragon shareholders back $4M injection to stave off liquidation
Businesses get some reprieve in March quarter on cheaper prices
NZ manufacturing activity expands on month in April but down on year
Xero's CEO says it still has a cautious future in the US

IRG See IRG research reports