NZ dollar hits 4-year low

NZ dollar hits 4-year low as White House downplays de-listing Chinese firms

By Paul McBeth

Oct. 1 (BusinessDesk) - The New Zealand dollar hit a four-year low as the greenback was buoyed when concerns over the ongoing US-China trade war were allayed by the White House playing down reports that it was considering de-listing Chinese firms from the US stock exchange.

The kiwi fell as low as 62.50 US cents, and was trading at 62.62 cents at 8am in Wellington from 62.66 cents at 5pm yesterday. The trade-weighted index was at 69.89 from 69.97.

Stocks on Wall Street rose and the greenback remained strong after White House trade adviser Peter Navarro dismissed reports that the US administration is considering de-listing Chinese firms to limit their access to US investment. The US dollar strength came at a time when the kiwi was already under pressure from yesterday's weak business confidence reading in spite of the Reserve Bank's efforts to revive investment by cutting the official cash rate to 1 percent.

"We remain of the view that the RBNZ’s growth forecasts are too optimistic and expect further OCR cuts in November and February," Bank of New Zealand interest rate strategist Nick Smyth said in a note.

"The NZ dollar has underperformed over the past 24 hours and it is the second weakest currency in the G10, above only the Swedish krona."

The New Zealand Institute of Economic Research's quarterly survey of business opinion is expected to echo the recent ANZ business confidence surveys in showing softer growth and inflation expectations. The NZIER data is a key survey tracked by New Zealand's central bank.

Today's policy review by the Reserve Bank of Australia will be closely watched. Investors have priced in an 80 percent chance the target cash rate will be cut by a quarter percentage point to 0.75 percent, which in turn would ratchet up pressure on the RBNZ to follow suit. The kiwi traded at 92.75 Australian cents from 92.71 cents yesterday.

The local currency traded at 67.68 yen from 67.64 yen yesterday, 4.4720 Chinese yuan from 4.4626 yuan, 57.44 euro cents from 57.32 cents, and 50.93 British pence from 51.01 pence.

(BusinessDesk)

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