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NZ dollar gains on weak US data, renewed trade concerns

Article – BusinessDesk

July 18 (BusinessDesk) – The New Zealand dollar gained on weak US housing data and renewed concerns about US-China trade tensions.
By Rebecca Howard
July 18 (BusinessDesk) – The New Zealand dollar gained on weak US housing data and renewed concerns about US-China trade tensions.

The kiwi was trading at 67.31 at 7:50 am in Wellington versus 67.11 US cents at 5:05pm. The trade-weighted index was at 73.63 from 73.44.

Overnight, the US Commerce Department said that June housing starts fell 0.9 percent from May. Residential building permits fell 6.1 percent, marking the biggest monthly drop since March 2016. Economists surveyed by The Wall Street Journal had expected a 0.7 percent decline for starts and a 0.3 percent decrease for permits.

Markets were also jittery on renewed US-China trade tensions as “there are heightened concerns that additional tariffs may be imposed by the US,” said Kiwibank trader Mike Shirley.

Earlier this week US President Donald Trump said he could impose tariffs on another US$325 billion “if we want.”

The South China Morning Post yesterday reported China’s foreign ministry spokesperson Geng Shuang saying that new tariffs would present “new obstacles” to any deal between the world’s two largest economies.

Shirley said markets were also concerned after some US companies reporting earnings overnight voiced concern about their short-term growth prospects, partly because of the US-China trade dispute.

Today, investors will be watching for Australian jobs data “to see if the employment figures give the Reserve Bank of Australia any reason to ease policy again,” said ANZ Bank FX/rates strategist Sandeep Parekh. ANZ expects employment growth stalled in June with the unemployment rate unchanged at 5.2 percent.

The New Zealand dollar was at 95.99 Australian cents versus 95.69, at 54.13 British pence from 54.03, at 59.96 euro cents from 59.82, at 72.74 yen from 72.60, and at 4.6270 Chinese yuan from 4.6180.

(BusinessDesk)

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