Wednesday 8th May 2019 |
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The New Zealand dollar hovered around 66 US cents amid US-China trade talk jitters and ahead of the Reserve Bank of New Zealand's rate decision later today.
The kiwi was trading at 66.01 US cents versus 66.12 US cents at 5pm yesterday. The trade-weighted index was at 72.14 from 72.15.
The "kiwi followed Australian dollar higher following the RBA’s hold decision yesterday, but the risk-off tone in global markets overnight has seen this more than fully unwind," ANZ Bank economists said in a morning note.
News that China's Commerce Ministry said Vice Premier Liu He will visit Washington to continue trade talks on Thursday and Friday. helped eased concerns about the US-China trade tensions. The outlook, however, is far from clear given US tariff increases remain on the cards for Friday.
"China’s Vice Premier Liu He and top US trade negotiator Robert Lighthizer will step back into the ring on Thursday in Washington for further negotiations to try and settle their country’s trade disputes. It seems unlikely the two sides are ready to reach an agreement, with Trump’s threat to increase US tariffs on Chinese goods not helping the negotiation process," ANZ said.
On the domestic front, the odds are even regarding a possible 25 basis-point rate cut to 1.50 percent at today's monetary policy review, the first to be carried out by a new committee that includes three external members. Economists polled by Bloomberg say the chance of a rate cut is slightly higher than the odds the bank stays on hold, but say it's a line-ball call. The decision will be published at 2pm.
ANZ Bank is expecting a "dovish hold," and says that should be enough to keep the New Zealand dollar under pressure.
The New Zealand dollar was largely unfazed by news that whole milk powder fell for the third consecutive event in the Global Dairy Trade auction overnight. The GDT index was up 0.4 percent but whole milk powder was down 0.5 percent.
The kiwi was trading at 94.17 Australian cents versus 93.95 Australian cents at 5pm. It was at 50.49 British pence from 50.38, at 58.98 euro cents from 58.95, at 72.82 Japanese yen from 73.14, and at 4.4739 Chinese yuan from 4.4801.
(BusinessDesk)
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