New Zealand Dollar Weaker Despite Building Permits Data
THE TAKEAWAY: New Zealand home-building approvals rise 12.5 percent in August > July and August readings the strongest in 2011 > Kiwi continues to trend weaker in anticipation of further data
The New Zealand Dollar continued to trend downward despite data pointing to a faster-than-expected rise in building permits in August. As of 22:45 GMT, the Kiwi continued its move within a narrow range established earlier on Thursday.
Source: FXCM Strategy Trader
According to Statistics New Zealand, seasonally-adjusted home-building approvals rose 12.5 percent month-over-month in August. Excluding apartments, approvals rose 16.9 percent. Meanwhile, the increase in building permits for July was revised up to 14.3 percent. The figures for July and August represent the fastest month-over-month increases since the beginning of 2011, and point to the relative resiliency of the construction industry in New Zealand despite a slowdown elsewhere in the economy.
Additional data releases – the NBNZ Business Confidence and Activity Outlook readings – are scheduled to be released on Friday and will further impact the Kiwi. In the wake of data earlier this week showing an August trade deficit twice as large as expected – implying waning support for the economy from the export sector – markets will focus on these readings to gauge possible support from domestic activity. Any indication of improving domestic conditions could provide a short-term boost to the Kiwi. However, with the RBNZ unlikely to raise rates this year, the NZD will remain under pressure.
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