The New Zealand dollar ended a roller-coaster day on Tuesday, with trading roiled by a White House spokesman appearing to say the US-China trade deal was over and then recovering once US President Donald Trump tweeted that the deal was intact.

The kiwi was trading at 64.71 US cents at 5pm from 64.29 cents at the same time on Monday.

The local currency traded as high as 64.97 US cents just before lunchtime locally when Trump's trade adviser Peter Navarro told Fox News the deal was over and that the “turning point” came when the US learned about the coronavirus only after a Chinese delegation had left Washington following the signing of the phase one deal on Jan. 15.

"It was an interview on Fox News and Reuters picked it up" and from there it began swirling around trading rooms, says Mike Shirley, a dealer at Kiwibank.

Navarro told Fox that China had "already sent hundreds of thousands of people to this country to spread that virus, and it was just minutes after wheels up when that plane took off that we began to hear about this pandemic. It’s over.” Navarro is one of the most outspoken critics of China among Trump’s senior advisers.

Markets around the world reacted, with equities markets in particular plunging, typified by the kiwi's fall to as low as 64.37 US cents.

But then Trump tweeted: "The China trade deal is fully intact. Hopefully, they will continue to live up to the terms of the agreement!"

Navarro then said his comments had been taken wildly out of context and that what he had meant was that US trust in China was over.

Kiwibank's Shirley said there's also increased chatter locally about the Reserve Bank's latest decision on monetary policy due tomorrow afternoon – it will be announced via press release and won't come with the full set of forecasts that accompany the quarterly monetary policy statements.

"No change is expected. It's going to be all about the language and the assumed inferences: what the market tries to think what they might be trying to convey," Shirley said.

The New Zealand dollar traded at 93.59 Australian cents, unchanged from 5pm on Tuesday, at 51.87 British pence from 51.88 pence, at 57.45 euro cents from 57.39 cents, at 69.34 yen from 68.75 yen and 4.5781 Chinese yuan from 4.5507 yuan.

The trade-weighted index was at 71.65 from 71.34 in late domestic trading yesterday.

The bid price on the two-year swap was at 0.2225 per cent from 0.2150 per cent, while the 10-year swap was at 0.7275 per cent from 0.7025 per cent yesterday.

-Originally published by BusinessDesk.