INDEPENDENT NEWS

NZ dollar eases as US-China trade war, Brexit saga drag on

Published: Thu 23 May 2019 08:27 PM
NZ dollar eases as US-China trade war, Brexit saga drag on
By Jenny Ruth
May 23 (BusinessDesk) - The New Zealand dollar was slightly weaker as indications of softness in the domestic economy added to worries about the United States-China trade war and the ongoing Brexit saga.
The kiwi was trading at 64.88 US cents at 5pm in Wellington from 64.94 at 8am. The trade-weighted index eased to 71.75 points from 71.77.
“We’re just drifting off day by day. This China stoush is ongoing and there’s a bit of risk-off in equities markets,” says Tim Kelleher, the head of institutional foreign exchange sales at Commonwealth Bank of Australia.
Corporate announcements in New Zealand haven’t helped domestic sentiment, Kelleher says.
Dairy giant Fonterra downgraded its expected payout for the season finishing this month, reflecting slightly weaker than expected prices for whole milk powder offset by the currency’s decline.
ASB Bank economist Nathan Penny estimated the change will reduce aggregate Fonterra farmer incomes by about $225 million.
Fonterra also downgraded its earnings guidance and says it plans to sell more assets.
As well, courier company Freightways said softer express package business growth in the second half poses some risks for the 2020 financial year.
“If you were reflecting on the kiwi economy, you would say both of those were pretty poor,” Kelleher says.
“Even though the kiwi looks like it’s oversold on the charts, it’s not bouncing.”
On the Brexit front, there is speculation in Britain that Prime Minister Theresa May could announce her resignation as early as Friday after her latest failure to get parliament to agree to her Brexit proposals.
The New Zealand dollar was trading at 94.37 Australian cents from 94.39, at 51.30 British pence from 51.28, at 58.20 euro cents from 58.23, at 71.57 yen from 71.65 and at 4.4855 Chinese yuan from 4.4851.
The New Zealand two-year swap rate fell to 1.5041 percent from 1.5239 yesterday, while the 10-year swap rate eased to 1.9950 percent from 2.0355.
(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

COVID-19 Sees Record 12.2 Percent Fall In New Zealand’s Economy
By: Statistics New Zealand
Scientists Release ‘Blueprint’ To Save Critical Ecosystems And Stabilize The Earth’s Climate
By: Joint Press Release
Independent Review Launched Into Assurances For Safe Transport Of Livestock By Sea
By: Ministry For Primary Industries
New Zealand PC Market Grows Nearly 40% Due To Work From Home Demand
By: IDC New Zealand Ltd
Mediaworks Reaches Agreement To Sell TV Operations To Discovery, Inc.
By: Mediaworks
Public Transport Distancing Requirements Relaxed
By: Ministry of Health
New Zealand Hemp Industry Set To Generate $2 Billion Per Annum And Create 20,000 Jobs
By: New Zealand Hemp Industries Association Inc
One In 14 Employed People Report High Risk Of Losing Jobs
By: Statistics New Zealand
ASB Quarterly Economic Forecast Shows NZ Economy Doing Better Than Expected, But Challenges Remain
By: ASB
Live Export Ship Carrying 5,800 New Zealand Cows Goes Missing In East China Sea
By: SAFE
FMA Releases Report Into Active And Passive Fund Management
By: Financial Markets Authority
New Zealand In Deepest Recession In Living Memory
By: New Zealand National Party
Record Transport Investment To Help Economic Recovery And Save Lives
By: New Zealand Government
Trucks And Roads The Key To Economic Survival
By: Road Transport Forum
Building Confidence Crucial Amid An Uncertain Economic Recovery, Says OECD
By: OECD
View as: DESKTOP | MOBILE © Scoop Media