NZD/USD Inches Up On ANZ Outlook Rise, Downtrend Dominates
- The business outlook in New Zealand improved in March according to an ANZ survey
- However, business confidence slipped a little
- The New Zealand Dollar rose very slightly
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A mixed business survey didn’t offer much for the New Zealand Dollar either way Wednesday, and failed to divert market attention from the bigger macro themes.
The March business activity outlook index from Australia and New Zealand Banking Group (ANZ) came in at 21.8, slightly better than the previous month’s 20.4. ANZ’s business confidence marker, released at the same time, slipped to -20 from -19. However, given the relentless focus on trade war prospects which have dominated the financial media this month, it might well be argued that this modest slide shows some resilience.
ANZ said that all its key activity measures actually improved a little this month, while remaining well below their cycle highs.
And indeed the market may have chosen to accentuate the positive in this report to a small degree, with NZD/USD up modestly in the immediate aftermath.
But the New Zealand Dollar remains under a bit of stress on its broader daily chart. Weaker inflation prints have led to some reining in of interest-rate rise expectations, at a time when currencies perceived as sensitive to global growth cycle, such as the kiwi, have taken fire as trade-war stories have swirled.
And domestically the Reserve Bank of New Zealand this week accepted a formal addition to its monetary policy mandate. It must now consider the maximum sustainable employment level in addition to its old inflation targets.
While this move has been well-flagged for months, its formal adoption may mean that local interest rates remain lower for longer than they might have without it.
Technically speaking NZD/USD remain in the downtrend which has been with us since late February, with another upside test looking to have failed already this week.
The channel downside has not been tested for a while and it is possible that a new, higher range base in the 0.7170 area is forming, based on the last couple of significant lows. However. it is probably wise for the uncommitted to await further, daily and weekly close confirmation of this.
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--- Written by David Cottle, DailyFX Research
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.