NZ dollar drops below 94 Aust cts ahead of Australian business confidence report
By Tina Morrison
Jan. 28 (BusinessDesk) – The New Zealand dollar dropped below 94 Australian cents overnight as investors await a report on Australian business confidence later today.
The kiwi slipped to 93.98 Australian cents at 8am in Wellington, from 94.25 cents at 5pm yesterday ahead of the NAB Business Confidence survey scheduled for release at 1:30pm New Zealand time. The local currency was little changed at 82.29 US cents.
The New Zealand dollar has advanced 17 percent against its Australian counterpart in the past year as a reviving local economy contrasts with a slowdown in Australia. Investors will be looking to see if Australian business confidence rebounded in December after a decline in November.
“Focus across the Tasman will be on the NAB business confidence survey,” Kymberly Martin, markets strategist at Bank of New Zealand, said in a note. “Consumer confidence has been losing ground in recent months, so the RBA will be hoping business confidence remains solid and translates into better investment spending in 2014.”
In November, Australian business confidence slipped one point to 5 while business conditions remained weak at -3.
Still, a strong reading will be needed for December to impact the cross rate, ANZ Bank said in a note.
Traders will also be keeping an eye today on Prime Minister John Key’s policy statement to the house at 2pm today as Parliament resumes after the summer break, ANZ said.
The New Zealand dollar edged up to 84.46 yen from 84.32 yen yesterday as concerns over emerging markets dissipated after the Central Bank of the Republic of Turkey called an extraordinary meeting to help settle the Turkish lira. Investors favour the yen in times of uncertainty.
The kiwi was little changed at 60.19 euro cents from 60.14 cents yesterday after a positive German IFO business confidence survey yesterday pointed to momentum in Europe’s largest economy.
The local currency dropped to 49.65 British pence from 49.86 pence yesterday ahead of the first reading of UK fourth quarter growth tonight.
The UK economy is forecast to have expanded 0.7 percent in the quarter, taking annual growth to 2.8 percent, marking the first year when the UK economy has grown in every quarter since the financial crisis struck in 2007.
The trade-weighted index was little changed at 77.93.