Kiwi gains but under pressure

The New Zealand dollar is heading for a 0.3 per cent weekly gain against the greenback but remains under pressure after US President Donald Trump called for more tariffs on Chinese goods and ahead of US jobs data.

The kiwi traded at US72.58c at 5pm from US73.04c on Thursday. It was at US72.34c a week ago.

The trade-weighted index slipped to 74.77 from 74.97.

Investors were cheered after comments from the White House indicated US officials would meet their Chinese counterparts before any new tariffs were imposed. In Asia, however, risk appetite was sapped when Trump said he has instructed the USTR (US Trade Representative) to consider whether US$100 billion ($137.9m) of additional tariffs would be appropriate given China’s “unfair retaliation”.

Investors, however, shifted their focus to US jobs data, expected overnight, which is a key indicator regarding the pace of any interest rate increases by the US Federal Reserve. The market expected the March employment report to show non-farm payroll growth of 178,000 versus 313,000 in the prior month and for average hourly wages to tick up slightly, according to Dow Jones Newswires.

If the number is in line with consensus and there is any sign of wage inflation, “it will be hard to keep the [US] dollar down”, said Tim Kelleher, head of institutional foreign exchange sales at ASB Bank

That, coupled with a lack of risk appetite, will mean “the kiwi is going to struggle”, he said. Still, Kelleher said the kiwi has quite strong support around US72c to US72.25c.

The kiwi decreased to A94.50c from A94.77c on Thursday and slipped to 4.5752 Chinese yuan from 4.5832 yuan.

The New Zealand dollar traded at €59.30c from €59.38c on Thursday and at 51.85p from 51.81p.