The New Zealand dollar fell as investors weighed up reports the White House is trying to restart talks with China in an effort to quell heightening trade tensions with the world's second-biggest economy.
The kiwi declined to 68.15 US cents as at 8am in Wellington from 68.28 cents yesterday. The trade-weighted index decreased to 73.22 from 73.33.
Stocks on Wall Street gained after Bloomberg reported US Treasury Secretary Steven Mnuchin has started speaking with Chinese vice-premier Liu He in an attempt to avoid a full-blown trade war. The two nations have been escalating trade barriers, sending ripples through financial markets with investors wary of the impact on global growth. Still, New Zealand's weak business confidence continues to weigh on the local economic outlook and the kiwi dollar lagged behind other risk-sensitive assets, falling to 91.67 Australian cents from 91.85 cents yesterday.
"That (Bloomberg) report has supported a recovery in US equities, with the S&P 500 currently up 0.6 percent, and supported commodity currencies, with the AUD and CAD the best performers overnight, albeit gains have been modest," Bank of New Zealand senior markets strategist Jason Wong said in a note. "The NZD has slightly underperformed the commodity block and has traded a fairly narrow 30 pip range over the past 24 hours."
Local data today showed New Zealand property values fell in the three months through July and sales activity declined. Statistics New Zealand will release June quarter labour market figures today which are expected to show a flat unemployment rate, slowing jobs growth and rising wages.
"Coming hot on the heels of signs of higher core inflation data, a positive surprise for wages would add to the case that the next move by the RBNZ will be tighter, not easier, monetary policy," Wong said.
The kiwi climbed to 76.20 yen from 75.82 yen yesterday after the Bank of Japan made smaller adjustments to its policy programme than some investors had predicted.
The local currency fell to 4.6368 Chinese yuan from 4.6570 yuan yesterday and traded at 51.90 British pence from 51.99 pence. It edged down to 58.26 euro cents from 58.28 cents yesterday.