NZ dollar drops vs greenback, euro on Trump's trade barriers, French election

Wednesday 26th April 2017

The New Zealand dollar tumbled against the greenback in a selloff of commodity-linked currencies after US President Donald Trump's administration imposed duties on Canadian softwood, and extend its slide against the euro on relief over France's presidential race.

The kiwi fell to 69.48 US cents as at 8am in Wellington from 70.33 cents late yesterday. It dropped to 63.49 euro cents from 64.30 cents.

The greenback rose to a 12-month high against the Canadian dollar after US Commerce Secretary Wilbur Ross announced duties averaging 20 percent on Canadian softwood, a move that follows Trump's criticism of Canada's tariffs on imports of US milk products. The Australian dollar, the South African rand and the kiwi all fell. New Zealand's dollar sank further following the weekend poll in France that delivered a two-horse race between centrist politician Emmanuel Macron and the far-right Marine Le Pen, with greater odds on Macron.

"Despite improved risk sentiment after the French election's first round outcome and an absence of any local economic data releases investors seem to be reacting to Trump's protectionist policies," traders at HiFX said in a note.

Gold fell about 1 percent overnight and Brent crude oil futures fell to a month-low before rebounding.

In New Zealand, traders will be watching for March migration data for signs the net inflow is slowing from record levels. Across the Tasman, first-quarter consumer inflation figures are due for release.

The kiwi fell to 54.15 British pence from 54.64 pence and declined to 76.93 yen from 77.16 yen. It was trading at 92.16 Australian cents from 92.46 cents late yesterday and 4.7798 yuan from 4.8085 yuan.

(BusinessDesk)

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