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NZ dollar under pressure as franc, yen find favour

Article – BusinessDesk

Dec. 7 (BusinessDesk) – The New Zealand dollar remained under pressure as heightened concerns over US-China relations encouraged investors to buy ‘safe haven’ currencies such as the yen and Swiss franc.NZ dollar under pressure as franc, yen find favour amid US-China trade tensions
By Paul McBeth

Dec. 7 (BusinessDesk) – The New Zealand dollar remained under pressure as heightened concerns over US-China relations encouraged investors to buy ‘safe haven’ currencies such as the yen and Swiss franc.

The kiwi traded at 68.71 US cents as at 8am in Wellington from 68.62 cents yesterday. The trade-weighted index was at 74.91 from 74.87 yesterday.

The yen and Swiss franc outperformed other currencies after the arrest of Huawei Technologies’ chief financial officer Wanzhou Meng in Canada for extradition to the United States reignited fears over the US-China relationship. Stocks on Wall Street fell as the arrest undermined earlier optimism that presidents Donald Trump and Xi Jinping were making efforts to cool the tensions.

“The arrest is seen by many as another source of US-China confrontation, striking at the heart of President Xi’s ambitions to make the country a technology superpower,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “Weaker risk sentiment sees JPY and CHF at the head of the leaderboard, although with gains of 0.5 percent against the USD, the moves haven’t been particularly large.”

New Zealand’s currency has climbed 6.6 percent on a trade-weighted basis from its trough on Oct. 8 as local data indicated the economy and labour market are stable, prompting traders to reign in expectations for a potential interest rate cut.

Weaker-than-expected Australian data this week helped boost the kiwi to an eight-month high against its trans-Tasman counterpart. It traded at 95.06 Australian cents from 95.04 cents yesterday.

“We still like the cross at these levels, even though it is near the top of its familiar trading range, with relative fundamentals in NZ’s favour at present,” Wong said.

The kiwi traded at 77.32 yen from 77.35 yen and increased to 4.7290 Chinese yuan from 4.7215 yuan. It decreased to 60.34 euro cents from 60.51 cents yesterday and fell to 53.73 British pence from 53.93 pence.

(BusinessDesk)

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