Kiwi dollar gains as US raises tariffs

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NZN

The New Zealand dollar has risen to a four-month high as US President Donald Trump raised tariffs on imports of washing machines and solar panels, raising fears about the White House's protectionist attitude.

A mixture of New Zealand Bank notes and coins.

New Zealand currency (file picture).

Source: istock.com

The kiwi dollar climbed as high as US73.64 cents and traded at 73.43 cents at 8am today in Wellington from US73.22c Tuesday. The trade-weighted index gained to 75.39 from 75.21.

The Dollar Index, a measure of the greenback against a basket of currencies, fell 0.2 per cent after US Trade Representative Robert Lighthizer announced plans to impose a new 30 per cent tariff on imported solar panels and tariffs of up to 50 per cent on residential washing machines.

The announcement comes as the US, Mexico and Canada prepare for the latest round of renegotiations on the North American Free Trade Agreement.

Trump has advocated tilting trade relationships in favour of the US, raising fears a growing tide of protectionist policies could weigh on global trade.

"While Trump had pledged to get tough with America's trade competitors during the election campaign, the move yesterday was the first time he had directly signed off on increased tariffs in his time in office," BNZ interest rate strategist Nick Smythe said in a note.

"The USD is generally weaker again, with Trump's imposition of tariffs seemingly the latest excuse to sell the dollar."

Still, equity markets were largely unfazed by the tariff announcement with stocks on Wall Street gaining on the strength of corporate earnings.

Today, the kiwi was little changed at 81.04 yen from 81.10 yen. It rose to 91.90 Australian cents from A91.66c and gained to 4.6995 Chinese yuan from 4.6842 yuan.

It increased to 52.51 British pence from 52.36p and traded at 59.79 euro cents from 59.73c.

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