The New Zealand dollar failed to break above 66 US cents as fears over trade tensions between China and the US were allayed by the prospect of talks later this month.
The kiwi rose as high as 66.09 cents overnight, but was trading at 65.85 cents as at 8am in Wellington from 65.83 cents yesterday. The trade-weighted index was unchanged at 71.65.
Commodity prices and stocks on Wall Street rallied as investors took heart from yesterday's news China will send Vice Commerce Minister Wang Shouwen to the US to discuss trade later this month. Tensions between the two largest economies have weighed on financial markets this year as the governments embarked on tit-for-tat responses in raising trade barriers.
"Markets found some solace after China's Ministry of Commerce announced it will send Vice Commerce Minister Wang Shouwen to the US to engage in low-level trade talks at the end of August," ANZ Bank New Zealand economists Miles Workman and Philip Borkin said in a note. "The NZD attempted to push a little higher overnight, assisted by slightly more positive trade headlines, but moves were not maintained and it finds itself at a similar level to yesterday."
Local data today includes New Zealand's June quarter producer prices index. Domestically, companies have struggled to pass on higher costs to consumers and the prospect of shrinking profitability has sapped optimism about the local economic outlook despite ongoing projected growth.
