By Rebecca Howard
Sept. 6 (BusinessDesk) - The New Zealand dollar remains firm on global optimism that the US and China might reach a
trade deal and after better-than-expected US data overnight.
The kiwi was trading at 63.76 US cents at 7:55 am in Wellington from 63.71 cents at 5pm. The trade-weighted index was at
71.03 from 70.96.
Risk appetite improved yesterday when China and the US agreed to hold high-level talks in October in Washington. It got
a further boost when the Institute for Supply Management said its non-manufacturing activity index increased to a
reading of 56.4 in August from 53.7 in July. Economists polled by Reuters had expected a lift to 54.0.
According to ISM, survey respondents "remain concerned about tariffs and geopolitical uncertainty; however, they are
mostly positive about business conditions.”
The ADP National Employment Report also showed private payrolls lifting by 195,000 jobs in August after rising by
142,000 in July.
News of the trade talks “was the spark that started the risk-on fire, a fire that was subsequently fueled by some
better-than-expected US data overnight,” Kiwibank trader Mike Shirley said.
The ADP data suggests a solid non-farm payrolls report tonight, said ANZ Bank. The median expectation is that the US
economy added 160,000 jobs last month.
"Without a downturn in private service sector jobs in the US, history shows that a recession is very unlikely," ANZ
FX/rates strategist Sandeep Parekh said.
US Federal Reserve chairman Jerome Powell is also scheduled to speak Friday in Zurich on the “Economic Outlook and
Monetary Policy.”
The speech will be closely watched as it is the final policy guidance before the Fed goes into blackout ahead of its
mid-September meeting, Parekh said. ANZ is forecasting a 25 basis-point Fed cut this month and another before year-end.
The New Zealand dollar was trading at 93.47 Australian cents from 93.48, at 51.70 British pence from 52.05, at 57.75
euro cents from 57.77, at 68.22 yen from 67.88 and at 4.5568 Chinese yuan from 4.5449.
(BusinessDesk)
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