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

 

NZ dollar firms as hopes for US-China trade talks sour

NZ dollar firms as hopes for US-China trade talks sour

The New Zealand dollar was slightly stronger as hopes sour for a positive outcome from this week's trade negotiations between China and the United States.

The kiwi was trading at 63.12 US cents at 5pm in Wellington from 62.96 cents at 7:55am. The trade-weighted index was at 70.52 points from 70.35.

The market is also awaiting the minutes of the Federal Reserve's last meeting for clues about what it will do next. The central bank last month cut the Fed Funds Rate by 25 basis points.

As China's Vice Premier Liu He and other officials head to Washington for negotiations scheduled for Thursday and Friday, the political tit-for-tat between the two nations has been worsening,. Investors fear there's no end in sight for the trade war they have waged since early last year.

Earlier this week, the US added 28 Chinese companies, organisations primarily involved in surveillance and artificial intelligence, to its blacklist, making it difficult for them to do business with US companies.

Since that was in retaliation for China's mistreatment of the Uighur muslim minorities, China has warned the US to stay out of China's internal affairs.

China has also suspended the broadcasting of US basketball games in China after the general manager of the Houston Rockets tweeted his support for Hong Kong protesters.

These developments have cast an increasingly dark cloud over market expectations for the trade talks.

"It looks like it's going to be a non-event," says Martin Rudings, a dealer at OMF. There's now talk that the Chinese delegation will cut their visit short, he added.

The kiwi should be capped at about 63.25 US cents because there's evidence of plenty of sellers at that level. While repeated attempts at pushing the currency lower have failed, "I still expect the kiwi to head towards 60 cents by the end of the year," Rudings says.

That's because of expectations that the Reserve Bank will continue to cut its official cash rate.

Rudings says the market currently has 29 basis points of the 25-point OCR cut expected in November priced in.

The New Zealand dollar was trading at 93.62 Australian cents from 93.51, at 67.64 yen from 67.47, at 4.5089 Chinese yuan from 4.4967, at 51.67 British pence from 51.55 and at 57.56 euro cents from 57.48.

The two-year swap rate edged up to a bid price of 0.8229 percent from 0.8111 yesterday while the 10-year swaps rose to 1.1125 percent from 1.1050.

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

SMC Expert Reaction: Record Dry Spells And Effects On Forests

With no rain forecast before Sunday, Auckland is about to break a record for the city's longest dry spell. Niwa says Auckland is likely to hit 40 consecutive days without rain this weekend . The upper North Island is seeing severe meterological ... More>>

ALSO:

Reserve Bank: Official Cash Rate Remains At 1.0 Percent

The Monetary Policy Committee has decided to keep the Official Cash Rate (OCR) at 1.0 percent. Employment is at or slightly above its maximum sustainable level while consumer price inflation is close to the 2 percent mid-point of our target range. ... More>>

ALSO:

Research: Climate Change Throws Tree Seeding Out Of Sync – New Study

Climate change is negatively affecting tree reproduction by throwing seed production systems out of synchronisation, according to a new international study co-authored by a University of Canterbury scientist. Many tree species worldwide produce large ... More>>

ALSO:


Science Media Centre: Novel Coronavirus Detected In China – Expert Reaction

The virus was detected after more than 40 people were hospitalised with pneumonia in Wuhan City, China and the outbreak traced to a large animal and seafood market. The Centers for Disease Control and Prevention reports that person-to-person transmission ... More>>

ALSO:

Science Media Centre: Flooding could release toxic gas – Expert Reaction

A chemical substance known as ouvea premix stored at an old paper mill in Mataura could release toxic ammonia gas if it comes in contact with water.More>>

ALSO: