The New Zealand dollar hit a two-week low as the looming Liberation Day, when the US plans to impose tariffs on its trading partners, continues to unnerve investors about the potential impact on global growth.
The kiwi fell as low as 56.49 US cents, trading at 56.69 cents at 7am from 57.06 cents yesterday, with speculation US President Donald Trump is considering a broad hike of up to 20% on countries.
“However, an across the board 20% tariff would go against Trump’s comment last week that he would be lenient and thought people would be pleasantly surprised,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “By all accounts, it still looks like a decision has yet to be made on the scope of the tariffs or when they will take effect.”
Goldman Sachs economists see a greater chance of a US recession stemming from a potential trade war, and investors flocked to safe-haven assets with gold futures up 1.2% at US$3,150 an ounce.
And the White House is said to be considering an executive order fast-tracking deep sea mining in international waters, to tap critical minerals on the seabed, according to a Reuters report.
Wall Street staged a late rally, with the tech-heavy Nasdaq down 0.4% at 7.40am in Auckland, while the Dow Jones Industrial Average was up 0.8%.
French politics
European stock markets were broadly weaker, with France’s CAC 40 falling 1.6%. National Rally leader Marine le Pen was barred from running in France’s next presidential election after she was convicted of embezzlement. The kiwi declined to 52.42 euro cents from 52.68 cents.
The UK’s FTSE 100 slipped 0.9% with airlines weighing on the British bourse after Virgin Atlantic said it saw signs of a slowdown in US demand for transatlantic travel.
Meanwhile, the Tokyo Stock Exchange will require companies listed on its premier Prime section of the market to disclose information in both Japanese and English from today as it attempts to make itself more attractive to foreign investors.
There’s no local data scheduled for today, while the Reserve Bank of Australia is due to review monetary policy today and is expected to keep the cash rate at 4.1%. The New Zealand dollar traded at 90.84 Australian cents from 90.93 cents yesterday.
Australian futures are pointing to a 0.4% increase for the S&P/ASX 200 index, unwinding some of yesterday’s sharp selloff across the Tasman.