NZD weaker as greenback gains

NZD weaker as greenback gains on news US-China trade talks to recommence

By Rebecca Howard

July 24 (BusinessDesk) - The New Zealand dollar fell after the greenback got a lift from news that US trade negotiators will head to China to recommence trade talks.

The kiwi was trading at 67.02 US cents at 8am in Wellington from 67.31 at 5pm. The trade-weighted index eased to 73.42 points from 73.66.

US trade negotiators will head to China for face-to-face talks as the world’s two largest economies try to strike a deal, sources told CNBC.

The U.S. officials will travel to China for discussions sometime between Friday — the start of a six-week congressional recess in Washington — and Thursday, Aug. 1.

The greenback was also firmer after US President Donald Trump and US lawmakers reached a two-year deal lifting government borrowing limits to cover spending. "We must never let the full faith and credit of the United States come under threat, and therefore are proud to have lifted the debt limit until July 31, 2021," said Speaker of the House Nancy Pelosi. The Republican-led senate must also pass the measure before it can be signed into law and Trump has indicated he will sign it.

“Kiwi lagged its G-10 peers, and sank as the USD maintained its strength on the back of the US debt ceiling agreement. Markets also continued to unwind their expectations for aggressive policy easing in the US,” said ANZ FX/rates strategist Sandeep Parekh.

The kiwi was at 53.90 British pence from 54.03 after news that Boris Johnson, who promised to exit the European Union with or without deal by the end of October, will replace Theresa May as prime minister.

“In the short term, ongoing uncertainty and the proximity of the Brexit deadline will continue to weigh,” said Parekh. He noted, however, with the UK Parliament going into summer recess at the end of this week and not returning until Sept. 3, there is unlikely to be much Brexit news of substance in the near term.

The New Zealand dollar was at 95.70 Australian cents from 95.86, at 60.11 euro cents from 60.13, at 72.56 yen from 72.78 and at 4.6108 Chinese yuan from 4.6328.

(BusinessDesk)

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