Kiwi claws back while global trade-war jitters remain

The New Zealand dollar pared some of its overnight losses against the greenback as risk aversion eased slightly in Asian trading although investors remain jittery about a possible global trade war.

The kiwi dollar traded at US72.26c from US72.17c as at 8am yesterday and US72.34c late Monday. The tradeweighted index was at 74.20 from 74.19.

The kiwi eased overnight Monday after China retaliated over US tariffs, sapping risk appetite. US equity markets also sold off sharply overnight Monday as China said it would impose tariffs of up to 25 per cent on a list of 128 products imported from the US.

ANZ Bank New Zealand chief economist Sharon Zollner said “it wasn’t surprising overnight [Monday] to see the New Zealand dollar take a bit of a hit. We have been saying for quite some time that its vulnerable to a bit of a turn in global liquidity and more generally in risk aversion and we did see a risk-off move,” she said.

She said it has bounced back a bit in Asian trading “consistent with a bit of a bounce in US equity futures, as some may see the move as a bit overdone.”

Westpac Banking Corp market strategist Imre Speizer said the kiwi “is still following the US dollar more than anything else”.

The kiwi traded at A93.94c from A94.16c late Monday as the Aussie benefited from the tick up in risk appetite slightly more than the kiwi did. He said there was little market reaction after the Reserve Bank of Australia kept rates on hold at a record low 1.50 per cent.

The kiwi fell to 76.55 yen from 76.89 yen late Monday and traded steady at 58.70 euro cents. It declined to 51.39 British pence from 51.59 pence Monday. — BusinessDesk