News Column

NZ Dollar Slides As New Zealand's Business Confidence Sinks

August 28, 2014

CANBERA (Alliance News) - The NZ dollar weakened against the other major currencies in the Asian session on Friday, after data showed that the nation's business confidence dipped for the sixth successive month in August.

Data from the ANZ Bank showed that the business confidence index in New Zealand came in with a score of 24.4 in August. That's down sharply from 39.7 in July, and it represents the sixth straight month in decline.

The survey's activity outlook came in at 36.6, down from 45.1 in the previous month.

In economic news, data from the Statistics New Zealand showed that the total number of building consents issued in New Zealand was up a seasonally adjusted 0.1% on month in July - coming in at 2,282. That was well shy of forecasts for an increase of 1.0% following the 3.5% gain in June.

In New York session overnight, the NZ dollar held steady against majors.

Pulling away from an early high of 1.1156 against the Australian dollar, the NZ dollar slipped to a 9-month low of 1.1190. Continuation of bearish trend may lead the kiwi to a support around the 1.12 mark.

Data from the Reserve Bank of Australia showed that credit to the private sector in Australia increased at a slower rate in July, less than the consensus estimate.Credit rose 0.4% month-on-month in July following the 0.7% increase in June. Economists had expected a 0.5% growth.

The kiwi fell to a 2-day low of 0.8357 against the US dollar, from an early high of 0.8384. If the kiwi extends its downtrend, it is likely to find support around the 0.82 area.

Against the yen, the kiwi dropped to a 2-day low of 86.67 from an early high of 86.95. The kiwi may test support near the 86.26 region.

Data from the Ministry of Economy, Trade and Industry showed that industrial production in Japan added 0.2% on month in July.That was well shy of forecasts for a gain of 1.0% following the 3.4% decline in June. On a yearly basis, industrial production fell 0.9% - also missing expectations for a fall of 0.1% following the 3.1% jump in the previous month.

The kiwi edged down to 1.5768 against the euro, from an early high of 1.5713. On the downside, 1.58 is seen as next support level for the kiwi.

Looking ahead, Eurozone CPI for August and unemployment rate for July are due to be released in the European session.

In the New York session, US personal income and spending data for July and Reuters/University of Michigan's final consumer sentiment for August are due be released.

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Source: Alliance News

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