Kiwi gains on possibility of nuke talks
The New Zealand dollar is headed for a 0.4 per cent weekly gain against the greenback after getting a lift from North Korean leader Kim Jong Un’s offer to stop nuclear missile testing and US President Donald Trump agreeing to meet Kim, possibly before May.
The kiwi dollar traded at US72.65c at 5pm yesterday versus US72.55c at 8am and from US72.91c late on Thursday. It was at US72.34c last Friday. The trade-weighted index was at
74.65 from 74.73.
Asian markets were cheered when South Korea’s national security adviser said that Kim Jong Un has committed to “denuclearisation” and to suspending nuclear or missile tests, Reuters reported. It also quoted Trump as tweeting that “a meeting is being planned”. However, while markets were cheered by that news, they were also cautious as Trump pressed ahead yesterday with import tariffs of
25 per cent on steel and 10 per cent for aluminium but exempted Canada and Mexico.
The kiwi rose against the Australian dollar on speculation Australia will be hit harder by US tariffs, gaining to A93.33c from A93.08c on Thursday. Given the trade concerns, “I think the aussie is quite vulnerable,” said Martin Rudings, senior dealer at OMF, adding that iron ore prices weakened in Asia yesterday.
Given that, the New Zealand dollar may push higher against the aussie in European trading, he said.
Looking ahead, he said the US nonfarm payrolls data would be key for markets trading overnight. Rudings said the data was likely to be “reasonably solid”, which would help the greenback. However, “I think the kiwi is going to go down a lot slower [than the aussie] on any payrolls strength” because of the trade concerns.
The US economy probably stacked on
200,000 jobs last month, according to a Dow Jones survey.
The New Zealand dollar rose to 59.01 euro cents from €58.77c late on Thursday and to
77.52 yen from ¥77.34. It fell to 4.6086 yuan from 4.6118 yuan and traded at 52.63 British pence from 52.43 pence.
New Zealand’s two-year swap rate fell 1 basis point to 2.19 per cent, and 10-year swap rate fell 2 basis points to 3.21 per cent.