NZ dollar slips as better US economic data buoys greenback
By Tina Morrison
Aug. 29 (BusinessDesk) - The New Zealand dollar slipped as the US dollar edged up following better-than-expected US economic data which lifted optimism about a recovery in the world's largest economy.
The kiwi weakened to 83.82 US cents at 8am in Wellington, from 83.91 cents at 5pm yesterday. The trade-weighted index was at 79.01 from 79.06 yesterday.
The US dollar index, which measures the greenback against a basket of currencies, rose overnight after a report showed the US economy expanded at a 4.2 percent annual rate in the second quarter, ahead of a previous estimate of 4 percent and the fastest pace since the third quarter of 2013. Meanwhile, separate reports on the labour market and the housing sector also pointed to a recovery in the US.
"The US dollar found support from the second read of US GDP, which contained positive revisions," ANZ Bank New Zealand senior economist Mark Smith and senior foreign exchange strategist Sam Tuck said in a note. " We expect NZD/USD to remain under pressure from both New Zealand and US data releases."
The kiwi will likely trade between 83.30 US cents and 84.20 cents today, ANZ said.
In New Zealand today, data on building permits for July will be published at 10:45am, and the ANZ business confidence survey is released at 1pm.
"Today's data will provide insights on how well the New Zealand economy is faring, while the Chicago purchasing managers survey and Michigan confidence (released in the US today) should continue to support the US dollar," ANZ said. "We continue to favour declines (in the kiwi) on US dollar optimism."
The New Zealand dollar edged up to 63.57 euro cents from 63.50 cents yesterday ahead of data on European inflation today.
The kiwi edged lower to 89.58 Australian cents from 89.65 yesterday, was little changed at 50.52 British pence from 50.55 pence, and dropped to 86.89 yen from 87.04 yen.