NZ dollar higher as greenback falters on trade jitters, weak US data
By Rebecca Howard
May 24 (BusinessDesk) - The New Zealand dollar was trading higher early Friday on weak US data and as US-China trade tensions show no sign of easing.
The kiwi was trading at 65.20 US cents at 7:45am in Wellington from 64.88 at 5pm. The trade-weighted index eased to 71.97 points from 71.75.
"The escalation of the US-China trade war took its toll on the markets overnight where we saw a sell-off of tech, industrials and energy stocks," said ANZ Bank FX/rates strategist Sandeep Parekh. Given that both sides will negotiate on their own terms "it could be years before the two superpowers can find sufficient common ground for a trade deal to occur," he said.
Parkeh said the US dollar was also weighed by weak housing and manufacturing data.
US new home sales fell 6.9 percent in April, reversing the recent strong upward trend. Manufacturing activity fell to its lowest reading since September 2009, with the new order measure below 50 - the threshold between expansion and contraction - for the first time in more than a decade.
The kiwi was trading at 51.52 British pence from 51.30 on increasing signs that Prime Minister Theresa May will soon depart. A revised exit deal now won't be voted on before June 7, the Telegraph reported.
"The UK Prime Minister won’t be putting her latest Brexit plan to the House of Commons and speculation is rife that she could resign as soon as tomorrow," said Parekh.
Domestically investors will be watching for overseas merchandise trade data for April. Economists are expecting a trade surplus of $375 million, according to the median in a Bloomberg poll.
The New Zealand dollar was trading at 94.55 Australian cents from 94.37, at 58.29 euro cents from 58.20, at 71.40 yen from 71.57 and at 4.5038 Chinese yuan from 4.4855