INDEPENDENT NEWS

NZ dollar rises as US-China trade negotiations dominate

Published: Thu 10 Oct 2019 08:44 PM
NZ dollar rises as US-China trade negotiations dominate
The New Zealand dollar firmed slightly after being batted hither and yon by news reports emanating from the China-US trade negotiations.
The kiwi was trading at 63.14 US cents at 5pm in Wellington from 62.94 cents at 8am. The trade-weighted index was at 70.43 points from 70.30.
Earlier today, the domestic currency fell in tandem with the Australian dollar after China's yuan fell on a South China Morning Post report that the negotiations aren't going well and that the Chinese delegation refuses to talk about forced technology transfers, a core US grievance in the negotiations.
It also repeated suggestions circulating yesterday that the two days of talks, scheduled for Thursday and Friday, will be cut short.
But Bloomberg then reported that the US is considering a currency pact with China as part of a deal including the suspension of planned tariff hikes. It may also allow US companies to deal with Huawei, news that saw the Chinese yuan rally and drag the NZ and Australian dollars up with it.
The kiwi was trading at 4.4914 Chinese yuan from 4.5865.
"Taking a step back, the moves have happened within a relatively narrow range, but they have been very quick, almost instantaneous," says Peter Cavanaugh, the senior advisor at Bancorp Treasury Services.
That's a measure of how nervous the market is about the outcome of the talks.
"Everyone from central bankers down to bank economists are pointing to the global risks headed by the China-US trade talks," Cavanaugh says.
Even the Federal Reserve, in the minutes released early today from its September meeting when it last cut interest rates, has the talks top-of-mind.
"They just said trade tensions – Jerome Powell is too polite to play President Trump's blame game."
President Donald Trump has been lambasting Powell, the Fed governor, criticising him most of this year in multiple tweets for not cutting rates more severely.
The New Zealand dollar was trading at 93.55 Australian cents from 93.50, 67.85 yen from 67.64, at 51.62 British pence from 51.51 and at 57.45 euro cents from 57.32.
The two-year swap rate edged up to a bid price of 0.8412 percent from 0.8229 yesterday while the 10-year swaps rose to 1.1300 percent from 1.1125.
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

RBNZ To Implement $30bn Large Scale Asset Purchase Programme Of NZ Govt Bonds
By: The Reserve Bank of New Zealand
Monetary Policy With Very Low Interest Rates
By: The Reserve Bank of New Zealand
More Snow On Glaciers But No Good News, Say Scientists
By: NIWA
Elevate NZ Venture Fund To Lift Productivity
By: New Zealand Government
New Legislation To Boost Organics
By: New Zealand Government
Misinformation Circulating On Biodiversity Policy
By: Forest And Bird
Govt Backs RBNZ Move To Support Economy With Lower Interest Rates
By: New Zealand Government
Reserve Bank announces further measures to support economy
By: RNZ
Holding Off The COVID-19 Recession – Expert Reaction
By: Science Media Centre
Banking Sector Prepared For Responding To COVID-19
By: The Reserve Bank of New Zealand
Reserve Bank’s ‘unconventional Tools’ Are Conventional Elsewhere
By: Social Credit
RBNZ Survey: Experts Say An Out-of-cycle Rate Cut May Cause Panic
By: Finder
Next Steps Of Govt And Business COVID-19 Response
By: New Zealand Government
NZX falls following US interest rate cut
By: RNZ
Coronavirus and the economy: Responding to Covid-19 with precision
By: RNZ
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media