NZ dollar dips as China-US trade tensions cast pall over global markets
By Paul McBeth
Dec. 10 (BusinessDesk) - The New Zealand dollar declined as attempts by the US to extradite a Huawei Technologies
executive heightened concerns that the US-China trade tensions will slow the global economy.
The kiwi traded at 68.49 US cents as at 8am in Wellington from 68.66 cents on Friday in New York, down from 68.83 cents
in Asia last week. The trade-weighted index decreased to 74.78 from 74.92 last week.
Stocks on Wall Street ended Friday weaker, with the Dow Jones Industrial Average falling 2.2 percent, as traders
digested the arrest of Huawei chief financial officer Meng Wanzhou in Canada. US authorities are seeking her extradition
over claims she was involved in violating US sanctions against Iran. Chinese authorities are protesting the arrest,
raising fears the trade stoush between the world's two biggest economies will reignite.
Weaker than expected US jobs growth also weighed on Wall Street, after Bureau of Statistics figures showed the world's
biggest economy added 155,000 jobs in November, missing the 198,000 forecast.
"The week is likely to start with the NZD again unlikely to be pushing higher, but whether it can make progress to the
downside is another matter," ANZ Bank New Zealand economists Sharon Zollner and Philip Borkin said in a note. "It has
been reasonably resilient through the latest equity malaise, in part because the USD is effectively now a high quality
‘risk’ currency too."
Local data today include September quarter manufacturing figures which will provide the last data point ahead of gross
domestic product stats out next week.
The kiwi slipped to 95.31 Australian cents from 95.48 cents last week, its highest close since July 2017. Bank of New
Zealand economists expect the kiwi to outperform its trans-Tasman counterpart through to the middle of 2019 due to
Australia's soft housing market and improving terms of trade relative to Australia's.
The local currency fell to 53.76 British pence from 53.96 pence last week in the run-up to the UK parliament's Brexit
vote on Tuesday. It dropped to 60 euro cents from 60.37 cents last week.
The kiwi declined to 77.02 yen from 77.45 yen last week and dropped to 4.7020 Chinese yuan from 74.7220 yuan.
(BusinessDesk)
ends