Kiwi dollar dragged down by the Aussie

The New Zealand dollar fell, dragged down by the Australian dollar, amid concerns about what a ban on Australian coal imports through China’s northern ports in Dalian might mean.

Both currencies steadied after Australian Prime Minister Scott Morrison, who is visiting New Zealand, said that the Chinese move doesn’t point to a souring of ties between Australia and China.

The kiwi was trading at US67.74c from US68.02.

The trade-weighted index was at 73.44 from 73.76.

The local currency is US0.89c lower than its US68.63c finish in New York a week ago. The risk of fruit fly discoveries in Auckland hurting horticulture and concerns about the state of the Australian economy are factors in the decline.

Reuters reported that five harbours overseen by Dalian customs, Dalian, Bayuquan, Panjin, Dandong and Beiliang, would no longer allow Australian coal to be cleared.

“It is a bit hard to know whether it is meaningful or not. Apparently, they do this all the time at various ports,” says Treasury Advisory principle Derek Rankin.

As with New Zealand, China is Australia’s largest trading partner and coal is its largest export there.

The New Zealand dollar is trading at A95.48c from A96.10c, 51.96 British pence from 52.19, 59.74 euro cents from 60.04, 75.02 yen from 75.35 and 4.5573 Chinese yuan from 4.5719. The two-year swap rate is at 1.8507 per cent from 1.8750 on Thursday; the 10-year swap rate is at 2.4500 per cent from 2.8750.