NZ Dollar Drops To Multi-day Lows Against Euro And Greenback
The New Zealand dollar edged lower against most of its major counterparts in late Asian trading on Wednesday following a report showed that business confidence in New Zealand fell for a third consecutive month in July. The kiwi slumped to multi-day lows against the currencies of the U.S. and Europe.
The National Bank of New Zealand business outlook report showed that there was now a clear change in direction and broad-based weakness in confidence, with a net 28 percent of respondents expect an improvement in business conditions in the year compared with 40 percent in the June survey. Business confidence figures of 50.1 percent in February was the highest reading in 11 years.
Market players are also cautious as the Reserve Bank of New Zealand is due to announce a decision on the official cash rate on Thursday. Analysts expect the Central Bank will raise the rate to 3.0% from the current level of 2.75%.
In the equity front, most Asian stock markets are trading higher with New Zealand’s NZX 50 index gained 0.43%, Australia’s S&P 200 index advanced 0.7% and the All Ordinaries index was up 0.6%.
At the same time, Hong Kong’s Hang Seng climbed 0.48%, China’s Shangai composite index soared 0.92%, South Korea’s composite index rose 0.17% and Taiwan’s main index advanced 0.24%.
Extending its previous session’s downtrend, the New Zealand dollar fell to a 5-day low of 1.7866 against the euro around 12:05 am ET. The euro-kiwi pair, which finished Tuesday’s North American deals at 1.7738, is presently quoted at 1.7848. On the downside, the domestic unit may find support around the 1.83 level.
The New Zealand dollar that closed Tuesday’s North American deals at 64.49 against the yen eased to as low as 63.93 before moving sideways around 12:05 am ET. The kiwi-yen pair is presently quoted at 64.0.
The kiwi depreciated by more 1.6 percent to reach a 2-day low of 0.7281 against the US dollar by 12:00 am ET from yesterday’s fresh multi-month high of 0.7399.
On the downside, 0.71 is seen as the next likely support level for the NZ dollar. The kiwi-greenback pair that was worth 0.7335 at Tuesday’s North American close is currently quoted at 0.7293.
On the flip side, the New Zealand dollar appreciated by 1 percent to reach a 12-day high of 1.2220 against the aussie after the Australian Bureau of Statistic’s data revealed a weaker-than-expected inflation in the second quarter, from a 2-day low of 1.2349 hit earlier in the session.
The New Zealand currency reversed its course around 9:50 pm ET against the aussie and the pair is presently quoted at 1.2271 and this may be compared to yesterday’s close of 1.2320. The next likely target for the domestic unit is seen at 1.2140 on the upside.
Australia’s consumer price index gained 3.1% year-on-year in the June quarter, the Australian Bureau of Statistics said. This was lower than analyst forecasts for a 3.4% rise and follows a 2.9% increase in prices in the March quarter.
On a quarter-over-quarter basis, consumer prices rose 0.6% between April and June, compared with a 0.9% rise in the March quarter. Economists had forecast a 1% increase.
Today’s inflation report may allow the central bank to keep interest rates unchanged next month.
Japan’s small business confidence report for July has been slated for release at 1:00 am ET.
The European Central Bank will publish its bank lending survey report at 4:00 am ET.
At 8:30 am ET, the U.S. durable goods orders report for June is expected.
The Federal Reserve is due to release its Beige Book, a compilation of anecdotal evidence on economic conditions from each of the 12 Federal Reserve districts, at 2 pm ET.
