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NZ dollar rises on hopes for US-China trade talks

Article – BusinessDesk

May 14 (BusinessDesk) – The New Zealand dollar was a little stronger after US President Donald Trump said he expects his countrys trade negotiations will be successful.NZ dollar rises on hopes for US-China trade talks, Vodafone deal

By Jenny Ruth

May 14 (BusinessDesk) – The New Zealand dollar was a little stronger after US President Donald Trump said he expects his country’s trade negotiations will be successful.

There was also speculation that the planned $3.4 billion purchase of Vodafone New Zealand by Infratil and Brookfield Asset Management may have led to the Canadian company setting up hedging for the transaction.

The kiwi was trading at 65.83 US cents at 5:20pm in Wellington from 65.71 at 8am. The trade-weighted index was at 72.49 from 72.19.

Mike Shirley, a dealer at Kiwibank, says the currency began to rise around the time the details of the proposed Vodafone purchase were announced.

“It’s just rumour and speculation that the Canadian crowd was looking to hedge some of that exposure – you don’t need too much to move the kiwi at that time of day before the Asian market opens,” Shirley says.

But the currency traded a fairly tight 30 basis point range all day, he noted.

Trump is set to meet China’s President Xi Jinping at the G20 Summit next month.

China has retaliated against the US move to raise tariffs previously set at 10 percent to 25 percent on about US$200 billion of Chinese imports by imposing its own tariffs on US$60 billion of US goods from June 1.

Beijing said it won’t swallow any “bitter fruit” that harms its interests.

“The market is certainly poised to react to any headline about China,” Shirley says.

The kiwi was trading at 4.5190 Chinese yuan from 4.5185, at 94.63 Australian dollars from 94.60, at 50.78 British pence from 50.70, at 58.55 euro cents from 58.50, and at 72.17 Japanese yen from 72.83.

The New Zealand two-year swap rate fell to 1.587 percent from 1.594 percent yesterday, while the 10-year swap rate fell to 2.088 from 2.105 percent.

(BusinessDesk)

Content Sourced from scoop.co.nz
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