NZ dollar retreats from overnight highs as Trump tariffs stoke trade-war fears
By Jonathan Underhill
March 2 (BusinessDesk) - 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.
(BusinessDesk)
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