NZ dollar gains as conciliatory President Xi soothes investor nerves
By Rebecca Howard
April 10 (BusinessDesk) - The New Zealand dollar rose after Chinese President Xi Jinping soothed investor jitters over a
possible trade war between China and the US.
The kiwi gained to 73.30 US cents as at 5pm from 73.05 cents as at 8am in Wellington and 72.93 cents late yesterday. The
trade-weighted index was at 75.24 from 75.04 yesterday.
Market sentiment had already improved overnight after US officials including Treasury Secretary Steven Mnuchin played
down the threat of a trade war. It then got a significant boost after Xi's keynote address to the Boao Forum, where he
called for an upholding of the multilateral trade system and said dialogue was the way to resolve disputes, spurring
gains on equity markets across Asia. According to Bloomberg, Xi vowed to open sectors of China’s economy from banking to
auto manufacturing, increase imports and expand protection to intellectual property and warned against returning to a
"cold war mentality".
"During President Xi's speech, markets interpreted his comments positively for risk assets," such as the kiwi dollar,
said Westpac Banking Corp market strategist Imre Speizer. "He made soothing sounds about trade, offering to lower
tariffs."
The kiwi overlooked weak local business confidence data and Speizer said the market will continue to be driven by global
risk sentiment, in particular, any headlines around trade.
The kiwi rose to 4.6130 yuan from 4.5939 yuan late yesterday. It traded at 94.76 Australian cents from 94.84 cents and
at 51.86 British pence from 51.74 pence. The kiwi increased to 59.50 euro cents from 59.42 cents and rose to 78.49 yen
from 77.70 yen yesterday.
New Zealand's two-year swap rate rose 1 basis point to 2.25 percent and 10-year swap rate lifted 2 basis points to 3.15
percent.
(BusinessDesk)