The New Zealand dollar is heading for a 0.6 per cent weekly gain as US tariffs on China take effect and ahead of the US jobs data later in the global trading day.
The kiwi traded at 68.03 US cents as at 5pm in Wellington from 67.86 US cents as at 8am in Wellington and 67.68 cents late yesterday. It was at 67.64 cents in late New York trading last Friday. The trade-weighted index rose to 72.79 from 72.44 late yesterday.
US tariffs on US$34 billion ($49.9b) worth of Chinese goods kicked in on Friday and investors waited to see how Beijing would respond, given that it has threatened to impose an equal amount of tariffs on US goods.
An editorial in the state-run China Daily said "the Trump administration is behaving like a gang of hoodlums with its shakedown of other countries, particularly China, and its unruliness looks set to have a profoundly damaging impact on the global economic landscape in the coming decades unless countries stand together to oppose it." China has "no choice but to fight back," it said.
Markets are also focused on the upcoming US nonfarm payrolls data and ANZ Senior Economist Phil Borkin said a surprise, particularly on the wages side, could move the US dollar around and therefore the kiwi.
The US economy probably added 195,000 jobs in June, down from 223,000 the previous month, economists say. Average hourly earnings probably rose 2.8 per cent from a year earlier.
"The wage number could have implications for what the Fed is going to do, so there is room for some reaction there," he said.
Borkin said the push higher in the kiwi is partly due to investors paring back a bit on their short positions, which had reached very high levels in recent weeks. Going short means betting on a currency to decline.
The kiwi dollar rose to 4.5248 yuan from 4.4931 yuan late yesterday. It traded at 91.93 Australian cents from 91.83 cents and rose to 75.33 yen from 74.73 yen. The kiwi was at 58.21 euro cents from 58.06 cents and gained to 51.45 British pence from 51.18 pence.
New Zealand's two-year swap rate rose 4 basis point to 2.17 per cent while 10-year swaps lifted 3 basis points to 3.03 per cent.