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Dollar Nears Seven-Week Low; Kiwi Jumps to Three-Week High on GDP Report

2018-9-20 14:54:31Basics of Trading
Dollar Nears Seven-Week Low; Kiwi Jumps to Three-Week High on GDP Report

The U.S. dollar traded near a seven-week low on Thursday while the kiwi jumped after data showed the country’s second quarter economic growth topped estimates.
The U.S. dollar index that tracks the greenback against a basket of other currencies inched down 0.01% to 94.11 by 12:22AM ET (04:22 GMT). Reports of the tariffs imposed by the U.S. and China on each other's goods being set at lower levels than expected were cited as headwind for the dollar prices, which is widely seen as safe-haven assets.
The dollar was also under pressure after a report said that the U.S. and Canada are unlikely to reach an agreement on NAFTA this week.
Meanwhile, the New Zealand dollar rose as much as 0.6% to a three-week high of $0.6652 after data from the Stats NZ revealed the country’s Q2 GDP rose 1% quarter-on-quarter in the three months through June and outperformed the general consensus of a 0.7% increase.
The Australian dollar, seen as a proxy for China-related trades, slipped on Thursday against the dollar but still hovered near three-week highs, having gained 1.5% so far this week. The AUD/USD pair last traded at 0.7256, down 0.09%.
Elsewhere, the USD/CNY pair inched up 0.02% to 6.8520 as the People's Bank of China (PBOC) set the yuan reference rate at 6.8530 vs Wednesday's fix of 6.8569.
"The PBoC intervened in early August when USD/CNY breached the psychologically important 6.9 level. With the resumption of direct intervention in the USD/CNY fixing, much tighter capital controls and still relatively large FX reserves (USD3.1trn as of end-August), we believe the PBoC is both willing and able to deliver a relatively stable USD/CNY around current levels for the time being,” analysts at Nomura said.
"The PBoC appears reluctant to let USD/CNY move higher, in our view, on domestic stability concerns and because of ongoing negotiations with the US on trade issues," they added.
The USD/JPY pair was down 0.12% to 112.17. The yen has pulled back slightly this week as investors reassessed the impact of the Sino-U.S. trade war.