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NZD tad higher after Trump complains about high greenback

Monday 4th March 2019

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The New Zealand dollar was slightly higher after the greenback was weighed by comments from US President Donald Trump who said the strong US dollar is hurting US competitiveness.

The kiwi traded at 68.08 US cents at 8am from 67.99 US cents late Friday in New York. The trade weighted index was at 73.78 from 73.71.

“I want a strong dollar, but I want a dollar that’s great for our country, not a dollar that is so strong that it is prohibitive for us to be dealing with other nations," Trump told  the annual Conservative Political Action Conference in Oxon Hill, Maryland, Reuters reported.  

“We have a gentleman in the Fed that loves quantitative tightening. We want a strong dollar, but let’s be reasonable,” Trump said.

Mike Shirley, senior dealer at Kiwibank, said Trump's comments, coupled with some softer US manufacturing data overnight Friday, helped push the kiwi higher.

However, it remains largely range bound and will continue to get pushed around by global sentiment. 

"It is probably likely to continue its role as a small cork in a very big sea of volatility," he said. 

With little domestic data this week, investors will be focused on the Reserve Bank of Australia's rate decision Tuesday.

ANZ's FX/rates strategist Sandeep Parekh said that weakening house prices in Australia and concerns around US-China trade and its potential impacts on Australia "has seen the market talk up chances of the RBA reducing its cash rate." However, the labour market remains strong and may give the RBA "room to breathe for now." 

Shirley said markets will also be focused on US jobs data later in the week.  This week's dairy trade auction may also garner some interest. 

The New Zealand dollar was trading at  95.94 Australian cents from 95.95, at 51.34 British pence from 51.48, at 59.80 euro cents from 59.75, at 76.09 yen from 76.05 and 4.5646 Chinese yuan from 4.5586.

(BusinessDesk)

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