NZ dollar falls after jump in US consumer confidence

Wednesday 29 March 2017 08:38 AM

NZ dollar falls after jump in US consumer confidence that may signal economic pickup

By Jonathan Underhill

March 29 (BusinessDesk) - The New Zealand dollar fell after a measure of US consumer confidence jumped to its highest level in almost two decades, signalling a pickup in the world's biggest economy.

The kiwi dropped to 70.08 US cents as at 8am in Wellington from 70.40 cents late yesterday. The trade-weighted index declined to 75.99 from 76.21.

The US Conference Board's consumer confidence index rose 9.5 points to 125.6 in March, the highest reading since December 2000, and Americans became more optimistic about both business conditions and the labour market. The survey may signal a pickup in the US economy, which had appeared to stumble in January, and comes after President Donald Trump signed an executive order to unwind the previous administration's climate change strategy, removing regulations imposed on oil and coal mining companies, having failed to push through healthcare reform.

"Even if consumers are a bit disappointed by the very latest political developments, there is plenty in this result to suggest that the US unemployment rate will track lower and spending higher," said Doug Steel, economist at Bank of New Zealand.

Also helping the greenback, Speaker of the US House of Representatives Paul Ryan said Republicans are united in their support for tax cuts, a signal that Trump's plans to reform tax and allow companies to pay less tax won't suffer the same fate as his attempt to reform Obamacare.

There is no local economic data of note scheduled for today. Statistics New Zealand is due to release research and development activity and expenditure, a two-yearly survey.

The kiwi fell to 4.8187 yuan from 4.8451 yuan. The kiwi dollar rose to 56.29 British pence from 56.02 pence, fell to 91.81 Australian cents from 92.39 cents and traded at 77.88 yen from 77.86 yen. It was little changed at 68.80 euro cents.

(BusinessDesk)

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