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

 

NZ dollar firms as trade talks, FOMC support global outlook

NZ dollar firms as trade talks, FOMC support global outlook

By Gavin Evans

Jan. 10 (BusinessDesk) - The New Zealand dollar rose as minutes from the Federal Reserve’s last rate-setting meeting and the conclusion of US-China trade talks left investors more confident about the global growth outlook.

The kiwi was trading at 67.99 US cents at 8:30am from 67.50 cents late yesterday. The trade-weighted index rose to 73.54 points from 73.26.

“Global equity markets and risk-linked currencies continue to benefit from optimism that the US and China are getting closer to agreeing a potential trade deal,” broker HiFX said in a note to clients.

After underperforming yesterday, the kiwi dollar is the strongest and Japan’s yen the weakest performing of the G10 currencies as investors “add risk to their portfolios,” the firm said.

The local dollar and global equity markets have firmed since Fed chair Jerome Powell’s comments last Friday that the Fed will be “patient” in its approach to raising interest rates further.

Minutes from the Fed’s December meeting released today show members of the bank’s Open Market Committee felt future US economic growth would remain “above trend”, even allowing for tighter financial conditions and slower global growth since their last meeting.

Further gradual increases would be needed and decisions on near-term adjustments of monetary policy stance “would appropriately remain dependent on the evolution of the outlook as informed by incoming data.”

Westpac called the FOMC minutes "supportive". Given the lack of local economic data - and the "huge swings" in market interest rates in recent days - a speech by Powell in Washington tonight "will obviously be of great interest," the bank said in a note to clients.

Global equity markets extended their recent gains overnight, buoyed by the prospect for progress in the long-running trade stoush between the US and China – the world’s largest economies. The S&P 500 index, a broad measure of US stocks, was recently up 0.6 percent.

Trade talks in Beijing – extended by a day – were the first meeting of officials since President Donald Trump and China’s Xi Jinping agreed a 90-day truce in tit-for-tat tariff hikes Dec.1.

They concluded yesterday with US under-secretary for trade and foreign agricultural affairs, Ted McKinney, saying the session had been “a good one for us,” the South China Morning Post reported.

They included discussion of how China would meet its December commitment to buy “substantial” volumes of US agricultural, energy and manufactured goods, according to statement from the US Trade Representative.

US officials had also pushed for “needed structural changes” in China’s approach to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft of trade secrets for commercial purposes. There was no indication of any agreements made, the Post reported.

The New Zealand dollar rose to 94.68 Australian cents from 94.26 cents late yesterday. It was at 53.12 British pence, from 53 pence, and at 58.86 euro cents, from 58.94 cents. It eased to 73.48 Japanese yen from 73.52 yen, and rose to 4.6313 Chinese yuan from 4.6145 yuan.

(BusinessDesk)


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Climate Summary: NZ’s Equal-2nd Warmest Year On Record

Annual temperatures were above average (+0.51°C to +1.20°C above the annual average) across the majority of New Zealand... 2018 was the equal 2nd-warmest year on record for New Zealand, based on NIWA’s seven-station series which began in 1909. More>>

ALSO:

GDP: Economic Growth Dampens In The September Quarter

Gross domestic product (GDP) rose 0.3 percent in the September 2018 quarter, down from 1.0 percent in the previous quarter, Stats NZ said today... GDP per capita was flat in the September 2018 quarter, following an increase of 0.5 percent in the June 2018 quarter. More>>

ALSO:

Up $1.20: $17.70 Minimum Wage For 2019

Coalition Government signals how it will move toward its goal of a $20 p/h minimum wage by 2021... “Today we are announcing that the minimum wage will increase to $17.70 an hour on 1 April 2019." More>>

ALSO:

Retail: IKEA To Open In New Zealand

Inter IKEA Systems B.V. is today announcing its intentions to grant the Ingka Group exclusive rights to explore expansion opportunities in New Zealand. More>>