Article – BusinessDesk
May 31 (BusinessDesk) – The New Zealand dollar gained after a survey showed business confidence rose for a third month while strong Australian exports, building approvals, and business lending figures drove up the Aussie dollar, dragging the kiwi with it.Tuesday 31 May 2016 05:30 PM
NZ dollar gains on rising business confidence, strong Australian data
By Jonathan Underhill
May 31 (BusinessDesk) – The New Zealand dollar gained after a survey showed business confidence rose for a third month while strong Australian exports, building approvals, and business lending figures drove up the Aussie dollar, dragging the kiwi with it.
The kiwi rose to 67.29 US cents as at 5pm in Wellington, from 66.84 cents yesterday. The local currency fell to 92.84 Australian cents from 93.34 cents yesterday.
A net 11 percent of firms surveyed in the ANZ Business Outlook in May were upbeat about the economy’s prospects for the year ahead, up from 6 percent in April, with the construction industry the most buoyant. In Australia, figures showed lending to businesses rose 7.4 percent in April, the fastest in seven years, outpacing mortgage lending. Meanwhile, Australian first-quarter balance of payments figures showed net exports could add 1.1 percentage points to gross domestic product and building approvals unexpectedly climbed 3 percent in April, against forecasts of a 3 percent decline.
“ANZ business confidence was reasonably perky and the Aussies have had quite a trifecta” of strong data, said Graham Parlane, private client manager at OMF. “The kiwi and the Aussie are looking pretty well bid.”
The Australian dollar rose to 72.47 US cents from 71.92 cents. Australia releases its first-quarter GDP report tomorrow.
More upbeat data on both sides of the Tasman may reduce the chances of central bank interest rate cuts in June. The Reserve Bank of Australia holds its monthly policy review on June 7, while the Reserve Bank of New Zealand releases its full monetary policy statement on June 9.
The two-year swap rate rose a basis point to 2.29 percent and the 10-year swaps rose 3 basis points to 2.9 percent.
The kiwi rose to 60.43 euro cents from 60.20 cents yesterday and rose to 45.85 British pence from 45.73 pence. The New Zealand dollar rose to 74.81 yen from 73.84 yen yesterday and increased to 4.4278 Chinese yuan from 4.3991 yuan.