By Rebecca Howard
Aug. 28 (BusinessDesk) - The New Zealand dollar stuck to a right range as optimism for a US-China trade deal faded and
the focus returned to a possible US recession.
The kiwi was trading at 63.64 US cents at 7:55 am in Wellington from 63.65 cents at 5pm. The trade-weighted index was at
71.03 from 71.07.
“The risk dial moved a bit more towards off overnight,” said Kiwibank FX trader Mike Shirley. Markets had been hopeful
about a possible deal after US President Donald Trump said US trade officials received calls from the Chinese saying
they wanted to return to the table.
China’s Foreign Ministry said on Tuesday it had not heard of any recent telephone call between the United States and
China on trade, according to Reuters.
“Trump appears to be closer to wanting to conclude a trade deal with China, and China has expressed a desire to avoid
the escalation of trade tariffs scheduled for September 1, but it appears the phone call between the leaders Trump
alluded to earlier in the week may not have happened,” ANZ Bank economist Michael Callaghan said.
As hopes for a deal dimmed, markets refocused their attention on a possible US recession.
According to economists, a sustained inversion of the yield curve is a pointer to later recession.
The 10-year Treasury yields were at 1.488 percent while the yields on two-year notes were 1.531 percent. The US dollar,
however, did find some support when data showed US consumer confidence remains resilient.
The Conference Board said its consumer confidence index "declined marginally" to 135.1 in August from 135.8 in July.
Economists polled by Reuters had forecast it dropping to 129.5 in August.
"While other parts of the economy may show some weakening, consumers have remained confident and willing to spend," said
Lynn Franco, senior director of economic indicators at The Conference Board
While the kiwi is getting pushed around by offshore events, Shirley said it is sticking to a 63.60 to 64.00 US cent
trading range. It was at 94.18 Australian cents from 94.17 cents, at 51.76 British pence from 52.11, at 57.37 euro cents
from 57.34, at 67.27 yen from 67.31 and at 4.5554 Chinese yuan from 4.5569.
(BusinessDesk)
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