NZ dollar gains as efforts to cool trade war weigh on greenback

Thursday 26th July 2018

The New Zealand dollar gained as attempts to soothe growing trade between the US and Europe allayed concerns about the spreading trade war, weighing on the greenback and bolstering investors' appetite for riskier assets.

The kiwi rose to 68.34 US cents as at 8.15am in Wellington from 67.90 cents yesterday. The trade-weighted index was 73.20 from 73.04 yesterday.

The US dollar index, a measure of the greenback against a basket of currencies, fell 0.4 percent as investors were buoyed by efforts to soothe growing trade tensions between the US and its major partners. A bipartisan bill was proposed by US senators to delay the introduction of US$200 billion of auto tariffs until an industry report by the International Trade Commission was conducted. Meanwhile, President Donald Trump opened his meeting with European Union president Jean-Claude Juncker on a positive note, saying he expected something "very positive" and was hopeful a deal could be worked out.

"There seemed to be plenty of headlines (especially regarding trade) overnight, but not a lot of conviction to market moves," ANZ Bank New Zealand economists Liz Kendall and Philip Borkin said in a note. "The USD did weaken a touch, which saw NZD drift modestly higher, and that upward drift remains a near-term bias at this stage."

With second-tier household price data scheduled locally, investors will be watching Australian trade figures today. The kiwi dipped to 91.64 Australian cents from 91.80 cents.

The kiwi traded at 58.28 euro cents from 58.13 cents yesterday and edged up to 51.80 British pence from 51.65 pence. It rose to 75.82 yen from 75.53 yen yesterday and gained to 4.6244 Chinese yuan from 4.6148 yuan.

(BusinessDesk)

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