Brexit ructions, US criticisms of China hit kiwi

The New Zealand dollar slumped on fears US criticism of China would hurt the chances of a US-China trade agreement and as the Brexit impasse appears to be leading to a general election in Britain.

The kiwi was trading at US63.69c at 5pm yesterday from US63.82c at 8.10am. The trade-weighted index was at 70.49 points from 70.62.

In a much-awaited speech, US VicePresident Mike Pence made a series of criticisms of China, from its predatory trade practices to jailing Muslim minorities and trying to stamp out corporate sympathy for the pro-democracy protesters in Hong Kong.

Pence said those protesters “have the . . . admiration of millions of Americans”.

After all that, Pence said President Donald Trump “remains optimistic an agreement can be reached” on trade with China. The two meet in Chile next month.

The two leaders are supposed to sign a preliminary agreement at that meeting.

On the Brexit front, “it looks like it’s going down the election route, which is a risk, although the polls are saying Johnson will win,” Speizer says.

UK Prime Minister Boris Johnson has called for an election on December 12, but the 2011 Fixed-Term Parliament Act requires two-thirds of MPs to vote in favour of an early election.

The New Zealand dollar was at A93.40c from A93.52c, at 49.58 British pence from

49.63, at 57.34 euro cents from 57.43, at

69.20 yen from 69.31, and at 4.5043 Chinese yuan from 4.5111.

The two-year swap rate edged down to a bid price of 0.9210 per cent from 0.9350 late on Thursday while the 10-year swaps fell to

1.3150 per cent from 1.3550.