Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


NZ dollar gains on deeper relationship with China

Monday 27 March 2017 05:12 PM

NZ dollar gains on deeper relationship with China

By Rebecca Howard

March 27 (BusinessDesk) - A series of cooperation deals inked between New Zealand Prime Minister Bill English and China Premier Li Keqiang gave the kiwi dollar a lift, despite jitters after US president Donald Trump failed to win enough support to repeal and replace the Affordable Care Act known as Obamacare.

The kiwi rose to 70.45 US cents as at 5pm in Wellington from 70.23 US cents as at 8am and 70.27 cents in late New York trading on Friday. The trade-weighted index was unchanged at 76.26.

OMF private client adviser Stuart Ive said the dollar dipped down to around 70 US cents after US president Trump failed to win enough support given the questions it raises about his ability to push things through going forward. "That seemed to have a bit of a knock-on effect, a bit of a risk-off scenario was played out initially," he said.

However, it "changed course" on the signing of the agreements between China and New Zealand, given the fiscal and trade benefits.

The Chinese premier, who is leading a delegation of senior ministers, government officials and businesspeople, met English at Premier House in Wellington today. At the end of the meeting, English said official talks to upgrade the existing FTA between the nations will start on April 25 with a goal of building on the deal that's seen two-way trade triple to $23 billion since it came into force in 2008. The meeting also saw 21 other agreements signed, including a six-month trial for 10 local meat processors to sell chilled meat to China for the first time, mutual recognition of trusted exporters to speed up the customs process, a new air services agreement to increase the number of flights between the countries, and the adoption of a climate change action plan.

The announcement "nudged things up a bit, in particular against the US dollar and the Aussie," said Ive.

Investors will now be focused on how markets in Europe and the US react to Trump's failed effort. Ive noted that Asian markets, although in negative territory, "aren't running away with it," which may underpin investors confidence overnight. "We could see further gains (in the kiwi) as long as markets don't get into a risk-averse scenario."

The kiwi dollar was at 56.23 British pence from 56.27 pence on Friday in the US while it gained to 92.34 Australian cents from 92.14 cents. It fell to 77.73 yen from 78.16 yen and rose to 4.8407 yuan from 4.8362 yuan. It slipped to 64.94 euro cents from 65.06 cents.

The two-year swap rate fell 2 basis points to 2.28 percent while the 10-year swaps were fell four basis points to 3.37 percent.



© Scoop Media

Business Headlines | Sci-Tech Headlines


Skodafone Goneski: Sky TV, Vodafone Drop $3.44 Billion Merger Plan

Sky Network Television and Vodafone New Zealand have terminated their merger agreement which aimed to create the country's largest telecommunications and media group, and have withdrawn an appeal against the Commerce Commission's rejection of the plan. More>>

Quake Insurance: Reforms To EQC Act Announced

· Increasing the monetary cap from $100,000 (plus GST) to $150,000 (plus GST) for EQC building cover.
· Clarifying EQC land cover is for natural disaster damage that directly affects the insured residence or access to it... More>>


Reserve Bank: Official Cash Rate Unchanged At 1.75 Percent

Global economic growth has increased and become more broad-based. However, major challenges remain with on-going surplus capacity and extensive political uncertainty... More>>

Kaikōura Earthquake: Private Insurers Receive $1.8b Claims

Insurance Council Chief Executive Tim Grafton said most is for commercial loss at $1.36 billion, with residential claims amounting to over $460 million. “...We have a high level of confidence that most people will have received settlement offers by the end of this year." More>>


Forms And Data: New Proposals To Simplify Personal Income Tax

The Government is proposing to make tax simpler for individuals, with people whose only income is from a salary, wages or investments no longer being required to file tax returns to receive tax refunds or to calculate any additional tax. More>>