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

 

NZ dollar falls as US-China trade tensions dominate

NZ dollar falls as US-China trade tensions dominate, US inflation data looms

By Jonathan Underhill

July 12 (BusinessDesk) - The New Zealand dollar fell amid expectations China will retaliate for the latest tariffs the US has announced on Chinese imports, which has weighed on prices of commodities and commodity-linked currencies.

The kiwi fell to 67.60 US cents as at 5pm in Wellington and earlier touched 67.46 cents, the lowest in more than a week, from 68.09 cents late yesterday. The trade-weighted index declined to 72.45 from 72.79 yesterday.

The New Zealand and Australian dollars have fallen in the wake of renewed trade war fears between the US and China, their biggest export market. Raw materials - dairy, coal and iron ore - dominate exports from the ANZ region and the CRB index of 19 commonly traded commodities fell 2.8 percent overnight. China, the world's biggest buyer of commodities, has vowed to retaliate, although it doesn't buy enough from the US to match it dollar for dollar.

"The market is expecting China is going to retaliate. I don't see them backing down," said Mitchell McIntyre, a dealer at HiFX. "That's why we've seen a bit of risk aversion over the past 24 hours."

McIntyre said a current support level for the New Zealand dollar at around 67.50 US cents is "holding for the time being."

The kiwi didn't move much after figures showed food prices rose 0.2 percent in June, which the government statistician attributed to an increase in the minimum wage. The food price index was released ahead of June quarter CPI, which Westpac Banking Corp is expecting to show a 0.6 percent increase in prices in the quarter for an annual gain of 1.7 percent. Economists at ASB bank said in a report today that increases in New Zealand's minimum wage and a move to collective bargaining will stoke wages and inflation over the next five years.

Tonight, the main focus may be the release of US CPI inflation, seen at 0.2 percent month-on-month in June for a year-on-year increase of 2.9 percent, up from 2.8 percent previously.

The kiwi dollar rose to 75.78 yen from 75.60 yen yesterday. It rose to 4.5182 yuan from 4.5367 yuan and fell to 91.53 Australian cents from 91.85 cents. The kiwi fell to 51.14 British pence from 51.35 pence and declined to 57.82 euro cents from 58.05 cents.

New Zealand's two-year swap rate fell 1 basis points to 2.16 percent and 10-year swaps were unchanged at 3.02 percent.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Geothermal: World-Leading Silica Extraction Project

Geo40, in cooperation with Contact Energy and the Ngati Tahu Tribal Lands Trust, is this month set to start commercially extracting silica from geothermal fluid as part of a world-leading sustainable energy partnership. More>>

Electrical Vehicles: New Database of Charging Stations

EVRoam, a real-time database of public charging infrastructure, provides one view of a safe, reliable and interoperable public charging network for electric vehicles in New Zealand. More>>

ALSO:

FMA Mulls Legal Action: Customers Not Focus At Insurers

Most firms had processes in place to identify when a customer was being advised to replace life or health insurance... Generally, these processes seemed oriented towards reducing firms’ legal risk, rather than to identifying and mitigating risks for customers. More>>

ALSO:

Brands Sale To RJ's: Nestle Job Losses “A Bolt From The Blue”

E tū has about 200 members at the plant, where up to 55 workers could lose their jobs... Well-known Kiwi brands affected by the sale include Mackintosh’s, Heards, Black Knight liquorice, Life Savers and Oddfellows. More>>

ALSO:

'Sanctuaries': New Seabed Mining Project Threatens Endangered Species

Greenpeace is shocked to discover that a new seabed mining exploration permit has been awarded inside a Marine Mammal Sanctuary, and is calling on the Government to reject all attempts to mine the seabed. More>>

ALSO: