NZ dollar rises against Aussie, Chinese yuan
By Jenny Ruth
May 20 (BusinessDesk) - The New Zealand dollar strengthened against its Australian counterpart and the Chinese yuan but was little changed against other currencies.
The local currency had previously weakened as the Australian dollar surged in the wake of the surprise outcome of Australia’s election which saw the Liberal-led coalition hold on to power but those gains were partly unwound during the day.
The gain against the yuan reflects China’s attempt to lessen the impact on its economy of United States tariffs on its exports there by devaluing its currency.
The kiwi was trading at 94.44 Australian cents at 5pm in Wellington from 94.27 at 8am. It climbed to 4.5484 Chinese yuan from 4.5169.
The centre-left Labor Party in Australia had been ahead in all the polls and had been expected to win. But the government led by Prime Minister Scott Morrison won at least 77 seats in the 150-seat lower house of Parliament with a number of seats still in doubt as vote counting continues.
Peter Cavanaugh, the senior client advisor at Bancorp Treasury Services, says China devalued the yuan against the US dollar by another 0.2 percent today, taking the extent of the devaluation so far this month to 2.2 percent.
Reports from Washington say trade negotiations with China have been put on hold since the US government took steps last week to make it more difficult for US companies to deal with Chinese telecommunications equipment manufacturer Huawei.
Reports over the weekend said Google has suspended some business with Huawei which means the Chinese firm will immediately lose access to updates to the Android operating system Google owns.
The New Zealand dollar was at 65.37 US cents from 65.31 while the trade-weighted index was at 72.12 points from 72.09. It was trading at 51.32 British pence from 51.28, at 58.59 euro cents from 58.54, and at 72.03 yen from 71.97.
The New Zealand two-year swap rate rose to 1.5484 percent from 1.5352 on Friday, while the 10-year swap rate edged up to 2.0675 percent from 2.0650.