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

 

NZ dollar weakens as USD boosted by China progress

NZ dollar weakens as USD boosted by China trade talks progress

By Gavin Evans

Jan. 9 (BusinessDesk) - The New Zealand dollar weakened against the US dollar amid signs of progress at US-China trade talks in Beijing.

The kiwi was trading at 67.22 US cents at 8:30am compared with 67.44 cents late yesterday. The trade-weighted index fell to 73.03 from 73.31.

“I think the markets are getting a bit more optimistic about those trade talks,” said Mark Johnson, private client manager at OMF.

Gains on equity markets overnight also reflected that “risk appetite has stayed positive” this week, he said.

Talks in Beijing between US and Chinese trade officials have been extended to a third day with both sides citing good progress.

Still, the risks of a further slowdown in the global economy remain real. Data overnight showed that German industrial production was weaker than expected in November – down 1.9 percent from October and 4.7 percent less than a year earlier.

Late yesterday, Korean tech giant Samsung Electronics cited poor sales in China for a 29 percent fall in December quarter profit.

OMF’s Johnson said the kiwi – which fell as low as 67.09 US cents overnight – is “still in a bit of a range” with resistance at 67.50 cents and initial support at 66.31 cents.

Given the dearth of local economic data, the next big focus for investors will be the release of minutes from the Federal Open Market Committee’s December meeting later today in the US.

Johnson said that material should help explain what has underpinned the change in the Fed’s thinking about interest rate rises this year. Markets jumped on Friday after Fed chair Jerome Powell reassured markets the central bank will be patient when considering further increases.

“Powell is really the one who has effectively told the market that rates are on hold.”

Risks of a no-deal Brexit may also be increasing, Johnson said. The European Union appear to be keen to help UK Prime Minister Theresa May, but that doesn’t extend as far as re-working the Brexit deal.

“There’s got to be a better than even chance that we will have a ‘no-deal’ Brexit,” Johnson said. “Their divorce date is getting so close now.”

Earlier this morning, May faced a humiliating defeat when Conservative and Labour MPs flexed their muscle in parliament - voting 303 to 296 in favour of an amendment curbing some government tax administrative powers in the event of no deal.

The kiwi dollar fell to 94.09 Australian cents from 94.61 cents late yesterday. It was little changed at 52.86 British pence, from 52.85 pence, and fell to 58.73 euro cents from 58.95. It fell to 73.02 Japanese yen, from 73.41 yen, and to 4.6052 Chinese yuan from 4.6229 yuan late yesterday.

(BusinessDesk)


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

9.3 Percent: Gender Pay Gap Unchanged Since 2017

“While it has remained flat since 2017, the gender pay gap has been trending down since the series began in 1998, when it was 16.2 percent,” labour market statistics manager Scott Ussher said. More>>

ALSO:

Ex-KPEX: Stuff Pulls Pin On Media Companies' Joint Ad-Buying Business

A four-way automated advertising collaboration between the country's largest media companies is being wound up after one of the four - Australian-owned Stuff - pulled the pin on its involvement as part of a strategic review of its operations ... More>>

Bus-iness: Transdev To Acquire More Auckland And Wellington Operations

Transdev Australasia today announced that it has agreed terms to acquire two bus operations in Auckland and Wellington, reaching agreement with Souter Investments to purchase Howick and Eastern Buses and Mana Coach Services. More>>

ALSO:

Māui And Hector’s Dolphins: WWF/Industry Counter Offer On Threat Management Plan

Forest & Bird says WWF-NZ's plan for protecting Māui dolphins is based on testing unproven methods on a species that is almost extinct, and is urging the Government to reject the proposal. More>>

ALSO: