So comes the end of another shaky week for the Kiwi dollar amidst slowing global conditions and an ever-escalating trade war between the US and China. As it stands, one NZD will buy you:
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The Purchasing Managers Index (PMI) for April was released this week. In essence, these are indexes that show the prevailing direction of economic trends in the manufacturing services sectors.
Data showed that there was an expansion in NZ’s manufacturing sector in April, rising from 53.00 in March to 53.00 in April. However, this was below market expectations of 54.5, so the data failed to provide an uplift in the value of the Kiwi dollar.
Any form of uplift is currently needed as the New Zealand economy feels the brunt of the current global slowdown and reduced demand for NZ exports.
This week saw the trade war between the US and China intensify. This was not great news for the NZD. China is New Zealand’s biggest trading partner, buying 24.9% of our exports. The trade war has caused a slowdown in the Chinese economy, which is hindering the value of the Kiwi dollar.
By June it is expected that all US exports to China will face tariffs between 5% and 25%. In addition to this, Trump has imposed regulations that restrict the worlds second largest smartphone maker, Huawei, from accessing the US market and American suppliers. In case you didn’t already know, Huawei is a Chinese company. Trump has done this in the hope of gaining dominance in 5G technology networks.
Despite this being a clear further escalation of trade tensions, markets were seemingly unaffected and shrugged off the information. This was good news for the NZD who couldn’t really cope with another blow this week.
In other good news, Trump has de-escalated trade friction with both the European Union and Japan by delaying auto tariffs for up to six months. He must have realised that it wasn’t the best idea to feud with multiple economics at the same time.
With another week of trading coming to a close, let’s cross our fingers, toes, arms, legs, and eyeballs in the hope that the Kiwi dollar will see some reprieve and increase in value next week.
In the meantime, why not sign up to the Travel Money Club and go in the draw to win $500* every month?
Oh, and Brexit has had a few developments
There will be another vote on the current Brexit
deal in the first week of June. If the deal is rejected, Prime Minister Theresa May has promised to resign and set a timetable for the election of her successor.
It is expected that the deal will be rejected, especially considering it has been knocked back three times already. In addition to this, EU elections will start next week on the 23rd of May.
All in all, though, there have been no massive changes to the fact that no one has any idea about what Brexit means.
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