Yen Gains on Trade Concerns; Kiwi Still Under Pressure After RBNZ Rate Cut
The safe-haven yen gained on Thursday in Asia amid intensifying Sino-U.S. trade tension. Meanwhile, the kiwi remained under pressure following the Reserve Bank of New Zealand (RBNZ)’s decision to cut benchmark rate.
The safe-haven yen rose 0.2% against the U.S. dollar by 11:44 PM ET (03:44 GMT), trading at 109.91, as concerns about the escalating trade war between the U.S. and China caused another day of sharp losses in global stock markets.
Chinese Vice Premier Liu He will meet with U.S. officials later in the day. U.S. President Donald Trump said on Sunday that he would hike tariffs on $200 billion worth of Chinese goods to 25% from the current 10% if an agreement was not met before Friday.
Washington has accused Beijing of backtracking on commitments made during trade negotiations. Overnight, Trump said China "broke the deal" in the ongoing U.S.-China trade talks.
"By the way, you see the tariffs we're doing? Because they broke the deal. They broke the deal," Trump said. "So they're flying in, the vice premier tomorrow is flying in — good man — but they broke the deal. They can't do that, so they'll be paying."
The USD/CNY pair gained 0.4% to 6.8071. Data showed this morning that China’s consumer price index in April jumped 2.5% from a year ago, in line with expectations but slightly higher that the 2.3% year-on-year in March.
A spike in pork prices (+14.4% year-on-year) contributed to higher food prices, the National Bureau of Statistics data showed.
Meanwhile, the New Zealand dollar remains under pressure after the Reserve Bank of New Zealand surprised the markets by cutting the benchmark rate from 1.75% to 1.50% on Wednesday. The kiwi fell to a six-month low immediately after the release of the central bank’s statement.
The NZD/USD pair last traded at 0.6570, down 0.1%.
Meanwhile, the Reserve Bank of Australia surprised markets by keeping rates unchanged a day earlier. The AUD/USD pair fell 0.2% to 0.6972.
The U.S. Dollar Index which measures the greenback against a basket of six major currencies was little changed at 97.412.