NZ dollar follows A$ higher after upbeat business confidence
NZ dollar follows A$ higher after upbeat business confidence; central banks loom
By Paul McBeth
Jan. 28 (BusinessDesk) - The New Zealand dollar followed its Australian counterpart higher after an upbeat business confidence survey across the Tasman, and ahead of the Reserve Bank and Federal Reserve meetings later this week.
The kiwi rose to 82.73 US cents at 5pm in Wellington from 82.29 cents at 8am and 82.22 cents yesterday. The kiwi slipped to 94.06 Australian cents from 94.25 cents yesterday.
Australian business conditions improved on rising sales and profitability in December, matching increasing optimism among firms across the Tasman, according to National Australia Bank’s monthly survey. That helped lift the Australian dollar, which traded at 87.88 US cents at 5pm in Wellington from 87.30 cents yesterday, and spilled over into support for the kiwi.
The survey came ahead of the US central bank’s monetary policy review on Wednesday in Washington, which is expected to show the Fed further trimming its monthly asset purchases, and New Zealand’s Reserve Bank review on Thursday in Wellington, where markets are divided on whether governor Graeme Wheeler will lift the official cash rate or wait until March.
The Australasian currencies have tested the bottom of recent ranges in the past few days, “opening up room on the downside for potential US dollar strength on Thursday morning,” said Alex Hill, head of dealing at HiFX in Auckland. “We could have something real in terms of risk, and that could have quite a big effect.”
A bout of risk aversion among investors eased today with gains in Turkey’s lira and South Korea’s won after fears over emerging markets surfaced last week after weaker than expected Chinese manufacturing figures.
Official figures today showed profits earnings by Chinese industrial firms rose 6 percent in December from a year earlier, slowing from a 9.7 percent annual pace of growth in November.
The kiwi climbed to 84.93 yen from 84.24 yen yesterday, and advanced to 60.48 euro cents from 60.11 cents. It was little changed at 49.78 British pence from 49.85 pence yesterday. The trade-weighted index gained to 78.20 from 77.88.