NZ dollar stays steady as trade talks continue

The New Zealand dollar was little changed as the market awaits further news on the USChina trade negotiations.

That was despite new tariffs that President Donald Trump imposed on Chinese imports into the US kicking in late in the New Zealand day.

The kiwi was trading at US65.87c at 5pm yesterday from US65.91c. The tradeweighted index was at 72.10 points from

72.15.

The tariffs on about US$200 billion ($303b) of Chinese goods will increase to 25 per cent from 10 per cent.

“We’ve seen limited reaction to it for two reasons,” said Mike Houlahan, a senior foreign exchange dealer at XE. “One is the trade talks are ongoing so they’re still trying to reach an agreement and, two, the increased tariffs only apply to goods that leave China from today onwards.

“Anything that’s already in transit, it won’t affect,” Houlahan says. By the time goods shipped today arrive in the US, the new tariffs may have been reversed. As well, the impact of the new tariffs had already been baked into market pricing since Trump tweeted about them last weekend.

A delegation led by China’s Vice-Premier, Liu He began a fresh round of talks last night, New Zealand time. Talks were set to resume overnight.

The New Zealand dollar was unchanged at A94.26c and unchanged at 50.64 British pence. It was trading at 58.67 euro cents from 58.73, at 72.25 Japanese yen from

72.30, and at 4.4878 Chinese yuan from

4.4981.

The New Zealand two-year swap rate rose to 1.6085 per cent from 1.6005 on Thursday while the 10-year swap rate fell to 2.1225 per cent from 2.1300.