Kiwi retreats on stronger US data, fails to break key resistance level
(BusinessDesk) - The New Zealand dollar fell, after failing to break through levels it hasn't topped since August last year, on stronger US economic data and concerns the US may provoke a trade war with its biggest trading partners.
The kiwi fell to 73.78 US cents as at 8am in Wellington from 73.88 cents in New York on Friday and down from as high as 74.38 cents in Asia last Friday. The trade-weighted index was at 75.49 from 75.54 in New York.
The University of Michigan consumer sentiment survey printed at a stronger-than-expected 99.9 in February while January housing starts and building permits for January were both higher than forecast. Meanwhile, the Commerce Department recommended that US President Donald Trump impose tariffs on aluminium and steel imports, a move that could spark retaliatory measures by China and other trading partners. With holidays in China and the US, though, the week may be off to a quiet start, traders said.
"The NZD got close to, but failed to breach, the 0.7440 level of technical resistance before peeling off to close the week around 0.7390," said Jason Wong, currency strategist at Bank of New Zealand, in a note. On potential US tariffs, "the concern is that imposing tariffs will result in retaliatory measures from other countries, triggering an economically harmful trade war."
Traders in New Zealand will be watching for the BuskinessNZ-BNZ performance of services index for January, due out today, after the manufacturing PMI rose 4.5 points to a seasonally adjusted 55.6 in January. In a relatively quiet week for scheduled economic events, the release of the minutes of the Federal Reserve's last policy meeting on Thursday will come into focus, traders said.
The kiwi dollar traded at 93.17 Australian cents from 93.18 cents in New York on Friday. It traded at 52.63 British pence from 52.57 pence. It was at 59.45 euro cents from 59.42 euro cents and rose to 4.6805 yuan from 4.6779 yuan. The kiwi edged up to 78.49 yen from 78.39 yen.