NZ dollar falls vs yen, steady vs greenback after Trump unveils tariffs on China
By Jonathan Underhill
March 23 (BusinessDesk) - The New Zealand dollar fell against the yen, which was broadly stronger as US President Donald Trump's announcement of US$60 billion of tariffs on Chinese goods stoked concerns about a trade war.
The kiwi dollar fell to 76.25 yen as at 8:30am in Wellington from 76.45 yen late yesterday. It dropped as low as 75.95 yen overnight - near its lowest since April last year. The kiwi traded at 72.22 US cents from 72.35 cents yesterday.
Trump revealed the first steps in sanctions against China, signing a directive that indicates the US deems China's trade stance puts an unreasonable burden on US commerce and at a media conference he said he saw the action as "reciprocal" - "if they charge us, we charge them the same thing." China has said it will respond and may refer the US moves to the WTO, a forum Trump may also appeal to. Trump's announcement came at the end of a 24-hour period in which both the Federal Reserve and the Reserve Bank met expectations with a hike and no change respectively and the Bank of England also left its policy rate unchanged.
"The JPY strengthened on trade concerns between the US and China leaving this cross near recent lows," said Miles Workman, senior economist at ANZ Bank New Zealand, in a note. "Against the greenback, the kiwi "managed to hold on to gains overnight despite increasing trade concerns between the US and China, which could be bad for global trade, growth and commodity prices."
The trade-weighted index rose to 74.32 from 74.24 late yesterday. The kiwi dollar rose to 51.18 British pence from 51.08 pence and traded at 58.69 euro cents from 58.51 cents and rose to 4.5716 yuan from 4.5460 yuan.
The kiwi rose to 93.67 Australian cents from 93.40 cents yesterday, extending its gains after figures from the Australian Bureau of Statistics showed 17,500 net new jobs were added in February versus forecasts for 20,000. The unemployment rate lifted to 5.6 percent from 5.5 percent in January. Economists had expected 5.5 percent.