The Kiwi Dollar begins the day slightly firmer as the USD lost ground after weaker than expected PMI data overnight. The Purchasing Managers Index hit a 15 month low in December, with over two thirds of manufacturers reporting higher costs, and attributing the rise in prices to trade tariffs. The survey also showed job creation slow to an 18 month low. Meanwhile the US Federal Government remains in shutdown over the budget impasse, and markets are focusing on the U.S/China trade negotiations as the two parties commence talks this week.
Markets hope for US China Trade Breakthrough
US and Chinese officials have begun talks in Beijing. Optimism is mounting that they will find a way to finally break the impasse in their nine-month long dispute. The US is seeking concessions in Chinese business practices; in exchange, it will eliminate tariffs recently imposed on Chinese goods.
On the local front, no major data of note this week, with the NZD expected to take direction from overseas and the market’s reaction to trade talks and the impact it has on global risk appetite. Across the ditch, we have Australian Trade Balance Data at 1.30pm this afternoon which has the potential to surprise.
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