NZ dollar under pressure, range bound ahead of key events
By Rebecca Howard
Sept. 25 (BusinessDesk) - The New Zealand dollar remained weaker against the greenback amid ongoing jitters about
China-US trade tensions and as investors await key risk events - including rate decisions in the US and New Zealand -
later this week.
The kiwi traded at 66.37 US cents at 5pm versus 66.40 US cents at 8am in Wellington and 66.69 cents yesterday. The
trade-weighted index decreased to 71.97 from 72.20.
The stand-off between China and the US continued. Reuters quoted Chinese vice commerce minister Wang Shouwen saying
China is being forced to retaliate against the United States in their trade dispute, and that US exporters, including
suppliers of liquefied natural gas, would “certainly” be hurt.
Markets are also still feeling the "residual effect of abandoned trade talks," said Imre Speizer, Westpac Banking Corp's
head of NZ strategy. During the weekend, China called off trade talks planned for this week.
The kiwi is largely treading water, however, ahead of the ANZ Business Confidence survey tomorrow, and rate
announcements from the US Federal Open Market Committee and New Zealand's central bank early Thursday.
The ANZ survey will be closely watched for any signs that business confidence is still waning, Speizer said. He's not
expecting a lot from the central banks.
"I don't think we will get any big surprises out of either," he said. The Fed could surprise in a hawkish direction and
signal more, rather than fewer, rate increases given the US economy is going "very, very well". He doesn't expect "a
major overhaul" from the Reserve Bank of New Zealand.
All 19 economists polled by Bloomberg expect the kiwi central bank to keep the official cash rate to remain on hold at a
record low 1.75 percent on Thursday. Most expect it will reiterate that rate cuts are still on the table.
The kiwi traded at 56.53 euro cents from 56.77 cents and declined to 50.65 British pence from 50.99 pence. It was at
91.63 Australian cents from 91.72 cents yesterday.
The New Zealand dollar decreased to 74.89 yen from 75.06 yen yesterday and fell to 4.5536 Chinese yuan from 4.5722 yuan.
New Zealand's two-year swap rate lifted one basis point to 2.04 percent while the 10-year swaps rose 3 to 2.93 percent.
(BusinessDesk)