The New Zealand dollar snapped a four-day rally as trade tensions between the US and China at the APEC meeting raised concerns that the dispute may spill over into slower global growth.
The kiwi declined to 68.34 US cents as at 8am in Wellington from 68.52 cents yesterday. The trade-weighted index fell to 74.45 from 74.67.
Stocks on Wall Street fell, with the Dow Jones Industrial Average down 1.9 percent in late trading, after APEC leaders failed to agree to a communique over the weekend. The tensions were underlined by US vice president Mike Pence and Chinese President Xi Jinping trading barbs in their respective speeches. The stand-off between the two major economies added to growing unease about global growth, weighing on risk-sensitive assets such as the kiwi.
“There are renewed concerns about US-China trade tensions following pointed comments and a lack of agreement at the APEC summit over the weekend, adding to more generalised concerns over global growth,” ANZ Bank New Zealand economists Liz Kendall and Philip Borkin said in a note. “The 200-day moving average – at 0.6890 – proved too much of a hurdle, and together with more negative trade headlines, has seen the NZD retreat from its highs.”
The local currency has climbed 4.9 percent this month and ANZ economists expect it will consolidate or give up some of its recent gains.
No local data is scheduled for today. Australian consumer confidence and minutes to the Reserve Bank of Australia’s November policy meeting are in view. The kiwi traded at 93.73 Australian cents from 93.68 cents.
The local currency fell to 4.7440 Chinese yuan from 4.7553 yuan yesterday and dropped to 76.87 yen from 77.21 yen. It decreased to 53.17 British pence from 53.36 pence yesterday and fell to 59.67 euro cents from 60.04 cents.