NZ dollar loses gains after Trump's economic advisor quits




The New Zealand dollar pared earlier gains against the greenback today after the resignation of US President Donald Trump's economic advisor Gary Cohn stoked renewed fears of a possible trade war.

New Zealand currency fifty dollar note money

New Zealand currency fifty, dollar note (file picture).


The kiwi traded at US72.58c as at 5pm in Wellington versus 72.94c as at 8am and 72.35c late today.

The kiwi rose to a week-high overnight on news that North Korea is willing to hold talks with the US over its nuclear weapons programme but pared most of those gains on the Cohn news.

Investors were jittery after Mr Cohn's resignation stoked fears Mr Trump will push ahead with tariffs on aluminium and steel and impose further protectionist trade policies, risking a trade war.

Mr Cohn, who was a key architect of the 2017 tax overhaul in the US and a former Goldman Sachs executive, did not spell out why he was resigning.

However, according to Bloomberg, Mr Trump demanded his cooperation with the tariffs.

"It's a risk-off move on the back of that. We have also seen equities move lower and Treasuries rally," said Tim Kelleher, head of institutional foreign exchange sales at ASB Bank.

The kiwi lifted against the Australian dollar, which was hurt by risk aversion and after Australia's economy grew by less than expected in the final quarter of 2017. The kiwi traded at A93.36c versus 92.96c today.

Looking ahead, Mr Kelleher said investors will be waiting for the Bank of Canada's rate decision later in the global trading day.

The kiwi traded at 77 yen from 76.95 yen Tuesday and edged up to 58.66 euro cents from 58.58c. It gained to 52.44 British pence from 52.25 pence and increased to 4.6091 yuan from 4.5872 yuan.

loading error