NZ dollar lifted as Donald Trump predicts great deal with China

NZ dollar lifted as Donald Trump predicts great deal with China

NZ dollar lifted as Donald Trump predicts great deal with China

Broad gains in the United States equity market boosted a measure of global stock markets on Tuesday after President Donald Trump said a "great deal" could be struck with China that would relieve fears of a growing trade war between the world's two largest economies.

In addition, after a 60-day public comment period, the final round of tariffs could go into effect in February - just in time for the Chinese Lunar New Year celebrations.

The US has already levied tariffs of 25 percent on $50 billion worth of Chinese goods, mainly industrial products, plus a tariff of 10 percent on another $200 billion worth of imports imposed in September that is set to rise to 25 percent at the start of next year. China's overnight repo rate surged the most in more than four years as authorities take steps to combat bets against the yuan, which held near the weakest level in a decade against the greenback. There have been no trade talks between the countries since August, when the USA imposed the latest round of tariffs.

Tariff "wave" the stock market gains away.

Hong Kong's Hang Seng Index fell 0.9 percent Tuesday, while the Shanghai Composite Index rose 1 percent. The Dow Jones industrial average swung between a gain of 352 points and a loss of 566 before closing down 245.39 points, or 1%, at 24,442.92. IBM fell 4.1 percent to $119.64.The prospect of reduced barriers to trade helped auto makers on Monday. dropped 6.3% to $1,538.88.

The move indicates the Trump administration remains willing to escalate its trade war with China even as companies complain about the rising costs of tariffs and financial markets continue to be nervous about the global economic fallout. The S&P 500 index swung by almost 4 percent from its high to the low in the trading session, with tech stocks and Boeing particularly hard hit.

The pan-European STOXX 600 index lost 0.14 per cent.

US crude fell 1.06 percent to $66.33 per barrel and Brent was last at $76.30, down 1.34 percent. Stocks climbed earlier this month after Bolsonaro led the previous round of voting, as investors preferred him to leftist parties.

The price of USA crude oil fell 0.8% to $67.04 a barrel in NY. The euro rose to $1.1377 from $1.1372.

The yield on the 10-year Treasury note rose to 3.08 percent from 3.07 percent.The price of us crude oil dropped 0.8 percent to $67.04 per barrel in NY while Brent crude, used to price worldwide oils, lost 0.4 percent to $77.34 per barrel in London.Wholesale gasoline added 0.5 percent to $1.82 a gallon and heating oil slid 0.8 percent to $2.28 a gallon.

CURRENCIES: The dollar strengthened to 112.95 yen from 112.37 yen late Monday.

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