By Rebecca Howard
July 31 (BusinessDesk) - The New Zealand dollar eased against the greenback after US President Donald Trump berated
China on Twitter just as a new round of trade talks between the two nations kicks off.
The kiwi was trading at 66.15 US cents at 8am in Wellington from 66.28 cents at 5pm yesterday. The trade weighed index
was at 72.81 from 72.97 points.
Trump tweeted that "China is doing very badly, worst year in 27 - was supposed to start buying our agricultural product
now - no signs that they are doing so. That is the problem with China, they just don’t come through," and "my team is
negotiating with them now, but they always change the deal in the end to their benefit."
The risk-off sentiment that resulted meant "the kiwi knocked on the door of 66 US cents overnight but no-one answered
that knock, so it bounced a little," Kiwibank trader Mike Shirley said.
Stronger-than-expected US consumer confidence data overnight also supported the greenback. The US Conference Board
survey showed confidence surged to 135.7 in July from 121.5, compared to expectations for a reading of 125.
"The strength in the forward looking indices suggests a positive start for US private consumption heading into the
second half of the year," said ANZ FX/rates strategist Sandeep Parekh.
For the most part, however, markets are trading sideways ahead of tomorrow's rate decision from the US Federal Reserve.
News that the core personal consumption expenditures price index - the Fed's preferred measure of inflation - lifted to
1.6 percent on an annual basis versus 1.5 percent in May added to the view that the Fed will cut the federal funds rate
by 25 basis points to a band of 2-2.5 percent.
Shorter term, Parekh said that today's ANZ business confidence outlook survey will garner some interest followed by
Australian inflation data.
The kiwi traded at 54.42 British pence from 54.64 pence yesterday, as volatility continues as UK Prime Minister Boris
Johnson "is doubling down on his Brexit or bust strategy," said Shirley.
It was at 96.20 Australian cents from 96.02, at 59.28 euro cents from 59.51, at 71.80 yen from 71.97 and at 4.5526
Chinese yuan from 4.5654.