New Zealand Dollar Ticks Up As Business Confidence Gains
- Business confidence in New Zealand rose in 2016’s final quarter
- The building sector remains upbeat despite some slowing in activity
- The New Zealand Dollar managed modest gains
The New Zealand Dollar inched up against its US cousin on Tuesday after the release of a survey showing that business confidence had risen slightly in its home country.
The New Zealand Institute of Economic Research (NZIER) index recorded a small net increase for the three months to December, with a net balance of 28% of respondents saying they expected an improvement in economic conditions over the next six months. That compares with the 26% balance recorded in 2016’s third quarter.
There was however a slide in confidence around firms’ own business activity, where the positive balance slipped to 25% from 32%. Regionally the South Island saw the best of things, with confidence there higher than it has been since early 2014. A bounce back in dairy prices which are highly important to New Zealand’s economy had helped.
The building sector stayed very upbeat, despite some signs of activity decelerating in some sectors.
The New Zealand Dollar posted modest gains after the data, which probably came at a pretty thin time for the currency markets given that the US was out on Monday for a holiday and Asian trade had yet to ramp up.
NZD/USD got as high as 0.71055 after the numbers, from 0.70976 before them.
Thin market gains? NZD/USD
Chart compiled using TradingView
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--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.