Kiwi Falls As New Zealand Business Confidence Hits Six-year Low
July 31 2015 - 12:20AM
RTTF2
The New Zealand dollar weakened further against the other major
currencies in the Asian session on Friday after data showed that
business confidence in New Zealand tumbled further to a 6-year low
in July, boosting the possibility of more rate cuts.
Data from the ANZ Bank showed that business confidence in New
Zealand tumbled further in July, with an index score of -15.3.
That's down from -2.3 in June, which had been the first negative
score for the index since March 2011.
In a speech, Reserve Bank governor Graeme Wheeler said earlier
this week further cuts to interest rates were likely this year, due
to weak dairy prices and a deteriorating external trade
position.
Traders also speculate that the RBNZ remains in easing mode as
the U.S. Federal Reserve have inched toward its first rate
hike.
At the same time, the ANZ Activity Outlook survey for July also
showed disappointing results, with the corresponding indicator
coming in at +19, down from 23.6 in the previous month.
Meanwhile, commodity prices fell, especially that of dairy
products, which are the nation's biggest export.
Thursday, the NZ dollar fell 0.94 percent against the U.S.
dollar, 0.77 percent against the yen, 0.12 percent against the euro
and percent 0.64 against the Australian dollar.
In the Asian trading today, the NZ dollar fell to a 1-week low
of 1.1093 against the Australian dollar, from yesterday's closing
value of 1.1039. The kiwi may now test support near the 1.12
region.
Data from the Australian Bureau of Statistics showed that the
final demand producer prices in Australia were up 0.3 percent on
quarter in the second quarter of 2015, following the 0.5 percent
increase in Q1. On a yearly basis, PPI climbed 1.1 percent after
gaining 0.7 percent in the three months prior.
Against the euro and the yen, the kiwi dropped to 3-day lows of
1.6644 and 81.47 from yesterday's closing quotes of 1.6547 and
81.93, respectively. If the kiwi extends its downtrend, it is
likely to find support around 1.68 against the euro, 80.00 against
the yen
The kiwi edged down to 0.6568 against the U.S. dollar, from
yesterday's closing value of 0.6600. On the downside, 0.64 is seen
as the next support level for the kiwi.
Looking ahead, Japan housing starts and construction orders for
June are due to be released at 1:00 am ET. Subsequently, German
retail sales data for June is slated for release at 2:00 am ET.
Eurozone unemployment rate for June and CPI for July are set to
be published later in the day.
In the New York session, Canada GDP for May, U.S. Chicago PMI
for July and University of Michigan's final U.S. consumer sentiment
index for July are due.
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