The New Zealand dollar fell against its trans-Tasman counterpart as investors were buoyed by more moderate tariffs in the US-China trade stoush.
The kiwi declined to 91.22 Australian cents from 91.56 cents yesterday. It edged down to 65.84 US cents from 65.90 cents yesterday.
The Australian dollar was the best-performing G10 currency overnight, recently up 0.5 percent to 72.18 US cents, as investors took heart from the US and China imposing smaller tariffs than initially feared. The US introduced a 10 percent tariff on US$200 billion of Chinese imports and China’s responded by slapping 5-10 percent tariffs on US$60 billion of American goods. Australia’s bigger export exposure to China typically means its currency reacts to events there more sharply than the kiwi.
“Markets seem to be taking some solace that the recent tariff announcements could have been even worse, with this cross easing overnight,” ANZ Bank New Zealand economists Liz Kendall and Philip Borkin said, referring the kiwi/Aussie crossrate. “Economically, we think this cross should continue to fall, but it would take a brave person to say the trade spat is over yet.”
Dairy prices fell 1.3 percent at the latest Global Dairy Trade auction, with whole milk powder prices down 1.8 percent to US$2,768 a tonne. A decline was expected.
Traders will watch June quarter balance of payments due today. It is expected to show the annual current account deficit widened to 2.9 percent of gross domestic product from 2.8 percent in the first quarter. The Westpac-McDermott Miller consumer confidence will also attract attention.
The kiwi fell to 4.5160 Chinese yuan from 4.5207 yuan yesterday and increased to 73.94 yen from 73.79 yen. It was unchanged at 50.09 British pence and traded at 56.42 euro cents from 56.36 cents yesterday. The trade-weighted index was little changed at 71.48 from 71.57.