NZ dollar falls vs greenback on drop in business confidence

Article – BusinessDesk

Nov. 30 (BusinessDesk) – The New Zealand dollar fell against the greenback after business confidence dropped sharply in November and weakened against the Aussie dollar after positive data across the Tasman.NZ dollar falls vs greenback on drop in business confidence, falls vs Aussie

By Rebecca Howard

Nov. 30 (BusinessDesk) – The New Zealand dollar fell against the greenback after business confidence dropped sharply in November and weakened against the Aussie dollar after positive data across the Tasman.

The kiwi fell to 68.46 US cents as at 5pm in Wellington from 68.88 cents yesterday. It was at 90.21 Australian cents from 90.80 cents late yesterday.

The kiwi took a tumble after the ANZ Business Outlook showed a net 39 percent of businesses were pessimistic about the year, the lowest level since early 2009, and a decline of 29 points from the previous month. A net 6.5 percent of companies see their own activity expanding, compared to a net 22 percent a month earlier. It fell against the Australian dollar after the Australian Bureau of Statistics said private new capital expenditure rose a seasonally adjusted 1 percent in the third quarter. Rising iron ore and rebar prices also helped shore up the Aussie.

The New Zealand dollar “had an ugly day,” said Tim Kelleher, head of institutional foreign exchange sales at ASB Bank. The rising metals “saw the Aussie-kiwi outperform quite strongly and that kept the pressure on the kiwi as well,” he said.

Looking ahead, Kelleher said investors will be watching for US jobless claims and core PCE price index data in particular, as it is the Federal Reserves’ preferred measure of inflation.

The kiwi extended its decline against the British pound on optimism the UK is overcoming hurdles to its European Union exit. It traded at 50.82 pence from 51.55 pence late yesterday and the lowest since June 2016 when the UK voted to withdraw from the EU.

The trade-weighted index was at 72.25 from 72.68. The kiwi dollar traded at 57.69 euro cents from 58.12 cents. It rose to 4.5215 yuan from 4.5455 yuan and at 76.65 yen from 76.78 yen.

New Zealand’s two-year swap rate fell 1 basis point to 2.13 while the 10-year swap rate fell 1 basis point to 3.07 percent.

(BusinessDesk)

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