Friday 2nd March 2018
|Text too small?|
The New Zealand dollar has gained from its levels late yesterday but has retreated from its overnight highs after US President Donald Trump announced tariffs on imported steel and aluminium stoking concern he may trigger a trade war that slows global growth.
The kiwi dollar traded at 72.23 US cents, and rose as high as 72.52 cents overnight, from 72.04 cents late yesterday. The trade-weighted index rose to 74.66 from 74.39.
Trump said he will impose a 25 percent tariff on imports of steel and 10 percent on aluminium steel imports as soon as next week, a move he said is aimed at protecting US industry. Meanwhile, Federal Reserve chair Jerome Powell talked about the US economy for the second time this month, although his remarks were seen as more dovish because he said there was "no evidence the (US) economy is overheating."
"A ‘trade war’ is an obvious risk to the global growth outlook, although the announcement could be seen as an attempt by the president to appease some of his core group of supporters ahead of the US mid-term elections this year," said Nick Smyth, interest rate strategist at Bank of New Zealand, in a note. "Meanwhile, there was a slightly more dovish tone to Fed chair Powell’s testimony to the Senate."
Among other data overnight, the US ISM manufacturing survey printed at a stronger-than-expected 60.8 in February while the core PCE deflator was as expected at 1.5 percent year-on-year in January.
The kiwi extended its gains against the Australian dollar, rising to 93.47 Australian cents from 93.18 cents yesterday when Australian government figures showed capital expenditure fell a seasonally adjusted 0.2 percent in the final quarter of last year versus expectations for a rise of 1 percent.
In New Zealand today, traders will be watching for January building permits for further evidence the housing market is cooling and February consumer confidence.
The kiwi traded rose to 59.19 euro cents from 59.07 cents and gained to 52.61 British pence from 52.37 pence. It rose to 4.5932 yuan from 4.5661 yuan and was little changed at 76.86 yen.
No comments yet
PFI doubles 2018 profit on valuation gains, underlying earnings fall short
Steel & Tube turnaround continues with 49% jump in first-half net profit
February 18th Morning Report
FIRST CUT: Port of Tauranga lifts 1H profit 4%
NZ dollar starts the week with a tailwind as positive US-China trade talks boost sentiment
Tax Working Group's capital gains proposal keenly awaited
MARKET CLOSE: NZ shares dip as global trade jitters weigh on A2, F&P
NZ dollar set for weekly gain after Reserve Bank surprise
Burger Fuel exploring sale after review questions listing merits
New net migration data to remain rubbery for quite some time