CANBERA (dpa-AFX) - The New Zealand dollar strengthened against other major currencies in the Asian session on Thursday. The U.S. Democrats and Republicans prepare for a prolonged government shutdown after the Senate failed to pass legislation restoring funding amid escalating U.S.-China trade tensions.
The escalation of trade tensions between the United States and China may have an impact on the China-proxy nation of New Zealand.
On the trade front, U.S. Trade Representative Jamieson Greer and Treasury Secretary Scott Bessent blasted China's plans to curb exports of rare earths 'economic coercion' and 'a global supply chain power grab'.
'If China wants to be an unreliable partner to the world, then the world will have to decouple,' Bessent said after earlier proposing a longer pause on high tariffs to ease a dispute over critical minerals.
President Donald Trump stated that the U.S. was now locked in a trade war with China, highlighting the importance of tariffs, framing them not just as economic measures, but as crucial components of national defense strategy.
Traders bet the Federal Reserve will press on with monetary easing through the end of the year after Federal Reserve Chair Jerome Powell cautioned on sticky inflation and flagged rising downside risks to U.S. employment.
With the publication of the data being indefinitely postponed due to the ongoing US government shutdown, traders are likely to keep an eye on remarks by several Fed officials.
Asian stock markets traded higher amid growing expectations of imminent U.S. Federal Reserve rate cuts.
In the Asian trading today, the NZ dollar rose to 3-day highs of 0.5756 against the U.S. dollar and 1.12878 against the Australian dollar, from yesterday's closing quotes of 0.5716 and 1.1387, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 0.59 against the greenback and 1.11 against the aussie.
Against the yen and the euro, the kiwi advanced to 86.88 and 2.0284 from a recent nearly a 2-week low of 86.04 and a 16-year low of 2.0399, respectively. On the upside, 88.00 against the yen and 1.99 against the euro are seen as the next resistance levels for the kiwi.
Looking ahead, Canada CFIB business barometer data for October and UK NIESR monthly GDP tracker for September are slated for release at 7:00 am ET.
In the New York session, Canada housing starts data for September, U.S. Philadelphia Fed manufacturing index for October, U.S. NAHB housing market index for October and U.S. EIA crude oil data are set to be published.
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