NZ dollar heads for 0.4% weekly gain as North Korean news cheers markets
By Rebecca Howard
March 9 (BusinessDesk) - The New Zealand dollar is headed for a 0.4 percent weekly gain against the greenback after getting a lift from North Korean leader Kim Jong Un's offer to stop nuclear missile testing and US President Donald Trump agreed to meet Kim possibly before May.
The kiwi dollar traded at 72.65 US cents as at 5pm versus 72.55 US cents as at 8am in Wellington and from 72.91 cents late yesterday. It was at 72.34 last Friday in New York. The trade-weighted index was at 74.65 from 74.73.
Asian markets were cheered when South Korea’s national security adviser said that Kim Jong Un has committed to “denuclearization” and to suspending nuclear or missile tests, Reuters reported. It also quoted Trump as tweeting that "a meeting is being planned." However, while markets were cheered by that news, they were also cautious as Trump pressed ahead on Thursday with import tariffs of 25 percent on steel and 10 percent for aluminium but exempted Canada and Mexico.
The kiwi rose against the Australian dollar on speculation Australia will be hit harder by US tariffs, gaining to 93.33 Australian cents from 93.08 cents yesterday. Given the trade concerns, "I think the Aussie is quite vulnerable," said Martin Rudings, senior dealer at OMF, adding that iron ore prices have weakened in Asia today.
Given that, the New Zealand dollar may push higher against the Aussie in European trading, he said.
Looking ahead he said the US nonfarm payrolls data will be key for markets trading later in the global trading day. Rudings said the data is likely to be "reasonably solid," which will help the greenback. However, "I think the kiwi is going to go down a lot slower (than the Aussie) on any payrolls strength," because of the trade concerns.
The US economy probably stacked on 200,000 jobs last month, according to a Dow Jones survey.
The New Zealand dollar rose to 59.01 euro cents from 58.77 cents late yesterday and to 77.52 yen from 77.34 yen. It fell to 4.6086 yuan from 4.6118 yuan and traded at 52.63 British pence from 52.43 pence.
New Zealand's two-year swap rate fell 1 basis point to 2.19 percent, and 10-year swap rate fell 2 basis points to 3.21 percent.