Kiwi steady over trade war hopes

The New Zealand dollar was steady against the US dollar and slightly higher against other major currencies on the back of rising equities and commodity markets.

As well, investors are growing more optimistic that China and the United States will soon reach an agreement to end their nine-month trade war. The kiwi was trading at US67.72c at 5pm yesterday, unchanged from at 8am. The trade-weighted index was at 73.29 points from 73.19.

“It’s risk-on across the board. Stocks are going higher — the US stock market had a great night on Friday — commodities are going higher, and both the kiwi and the Aussie have been dragged higher,” says Mitchell McIntyre, senior foreign exchange dealer at XE.

Positive data out of China, including a 14.2 per cent rise in exports in March from a year earlier and strong lending figures, probably weren’t enough on their own to explain the more positive tone, McIntyre says. “Trade negotiations coming along between the US and China have helped to support markets,” he says. “It’s generally improved risk sentiment across the board and the kiwi and Aussie are benefiting.” The kiwi dollar was at 94.45 Australian cents from 94.18 cents, and at 51.71 British pence from 51.68 pence. It was at 59.87 euro cents from 59.84 cents, at 75.79 Japanese yen from 75.70 yen and at 4.5429 Chinese yuan from 4.5332 yuan.

The New Zealand two-year swap rate rose to 1.7 per cent from 1.6662 while the 10-year swap rate edged up to 2.930 per cent from 2.2450. The twoyear rate has lifted off its record low at 1.5475 on March 28, the day after the Reserve Bank changed its stance from neutral.