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NZ dollar slides to 5-month low against Aussie

Article – BusinessDesk

Sept. 13 (BusinessDesk) – The New Zealand dollar reached a five-month low against the Australian currency as the latter benefited more on news that United States President Donald Trump is willing to make an interim trade deal with China.NZ dollar slides to 5-month low against Aussie

By Jenny Ruth

Sept. 13 (BusinessDesk) – The New Zealand dollar reached a five-month low against the Australian currency as the latter benefited more on news that United States President Donald Trump is willing to make an interim trade deal with China.

The kiwi was trading at 93.15 Australian cents at 5pm in Wellington from 93.30 at 7:45am. It was off the day’s low at 93.13 Australian cents, the lowest level since hitting 93.06 on April 17.

“Any news on the trade front is going to help the Aussie more than the kiwi,” Michael Johnston, a dealer at XE said, adding that it’s possible the kiwi will break through the 93 Australian cent support level.

The long-term average is more like 86 Australian cents, but it’s unlikely to go that low short term, he says.

Trump confirmed speculation that his team has been pitching the idea of an interim trade deal with China in order to reduce tensions with Beijing, according to the Financial Times.

“I see a lot of analysts are saying an interim deal, meaning we’ll do pieces of it, the easy ones first,” the FT quoted Trump as saying.

However, the internal debate within the White House about whether to de-escalate is far from finished and Trump could still decide to keep intensifying the trade war in coming weeks.

Nevertheless, Washington officials are looking at removing some or all of the tariffs imposed on US$112 billion of Chinese imports from Sept. 1 and possibly holding off planned increases in tariffs scheduled for October and December.

Earlier this week, Trump postponed for two weeks an increase in tariffs on US$250 billion of Chinese imports set to kick in on Oct. 1. The original date coincided with the 70th anniversary of the founding of the People’s Republic of China.

Formal talks between the two nations have been scheduled for early October.

The kiwi little changed against the US dollar, trading at 64.04 US cents at 5pm in Wellington from 64.04 at 7:45am. The trade-weighted index was at 70.98 points from 71.00.

Johnston says other than the trade news, trading had been very quiet today. Volatility could increase towards Thursday next week when a plethora of both local and global events are due.

The Federal Reserve and the Bank of Japan are both set to make interest rate decisions on Thursday while New Zealand GDP data for the June quarter and Australian employment figures for August are due the same day.

The New Zealand dollar was at 51.85 British pence from 51.90, at 57.84 euro cents from 57.88, at 69.24 yen from 69.25 and at 4.5304 Chinese yuan from 4.5332.

The two-year swap rate edged up to a bid price of 1.0034 percent from 0.9995 yesterday. Longer-term interest rates broke their recent bearish streak, with 10-year swaps easing to 1.4075 percent from 1.4100. The 10-year swapped has risen from 1.1350 percent on Sept. 2.

(BusinessDesk)

Content Sourced from scoop.co.nz
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