INDEPENDENT NEWS

NZ dollar lifts against USD

Published: Tue 18 Sep 2018 08:42 PM
NZ dollar lifts against USD as China offers no immediate trade retaliation
By Rebecca Howard
Sept. 18 (BusinessDesk) - The New Zealand dollar rose against the greenback as markets took new US tariffs on Chinese imports in their stride and there was no immediate retaliation from China.
The kiwi traded at 65.90 US cents at 5pm in Wellington from 65.78 US cents at 8am and 65.54 cents yesterday. The trade-weighted index was at 71.57 from 71.34 yesterday.
The kiwi dipped after the Office of the US Trade Representative released a list of approximately US$200 billion worth of Chinese imports that will be subject to additional tariffs. The tariffs will be effective starting Sept. 24, initially at 10 percent and then rising to 25 percent from Jan. 1.
However, the New Zealand dollar pared those losses when it appeared that China wasn't planning to immediately retaliate, although that could change, said Martin Rudings, a senior dealer in foreign exchange at OMF.
The South China Morning Post reported that China is likely to cancel its tentative plans to send Xi Jinping’s top economic adviser to Washington, quoting a government source.
"That has set the cat among the pigeons" and will reignite fears of a protracted trade dispute, Rudings said.
The kiwi also remained steady against the Australian dollar after the Reserve Bank of Australia published minutes from its Sept. 4 meeting. It was trading at 91.56 Australian cents from 91.60 late yesterday.
"They were quite upbeat on growth. They seem pretty comfortable with rates as they are," said Rudings.
Domestically the kiwi got an early lift after Prime Minister Jacinda Ardern mistakenly said she was "pretty pleased" with gross domestic product growth having received a "hint" ahead of Thursday's official release of the second-quarter economic data.
Her comments were then downplayed by her chief press secretary who said she was referring to the government's June year financial statements and had "made a mistake."
Economists expect the data to show GDP expanded 0.8 percent from the first quarter and 2.5 percent from a year ago, according to the median in a Bloomberg poll of 16. The central bank is tipping growth of 0.5 percent.
"The market is already looking for a 0.7 percent to 0.9 percent lift and that may have just cemented that," regardless of whether the prime minister saw the number, said Rudings. As a result, anything lower will weigh on the kiwi.
Ahead of that, investors will be watching for the global dairy trade auction later in the global trading day, with milk futures pointing to a 3 percent to 5 percent slide in whole milk powder prices.
The kiwi was at 50.09 British pence from 50.08 pence yesterday. The local currency traded at 56.36 euro cents from 56.31 cents yesterday. It was at 4.5207 Chinese yuan from 4.5000 yuan yesterday and increased to 73.79 yen from 73.37 yen.
New Zealand's two-year swap rate rose 2 basis points to 1.99 percent while 10-year swaps rose 3 basis points to 2.87 percent.
(BusinessDesk)
BusinessDesk
Independent, Trustworthy New Zealand Business News
The Wellington-based BusinessDesk team provides a daily news feed for a serious business audience.
Contact BusinessDesk
Email:

Next in Business, Science, and Tech

Australian bushfires continue to blaze – Expert Reaction
By: Science Media Centre
Higher retail consumption lifts GDP
By: Statistics New Zealand
Fairer pay with minimum wage rise for quarter of a million
By: New Zealand Government
Tourism and Environment: Pristine, popular... imperilled?
By: Parliamentary Commissioner For The Environment
Gordon Campbell on the Aussie bush fires and Suleimani
By: Gordon Campbell
Bushfire Crisis: Climate Politics Turning Point Aus Needs?
By: The Conversation
Scott Morrison: the bushfires demand a climate policy reboot
By: The Conversation
Incendiary Extinctions: Australian Fires
By: Binoy Kampmark
Aussie bushfire smoke reaches NZ – update 2nd Jan 2020
By: NIWA
2019 NZ's fourth warmest year on record - Expert Reaction
By: Science Media Centre
2019 second hottest year on record, UN confirms
By: UN News
Fossil Fuel Companies Called On To Foot Australia Fires Bill
By: Eoin Higgins
GDP growth reflects a strong economy
By: New Zealand Government
NZ in ‘GDP per person recession’ under Labour
By: New Zealand National Party
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media