NZ dollar heads for 0.6% weekly as business confidence falls

NZ dollar heads for 0.6% weekly as business confidence falls, Robertson hints at slowdown

By Rebecca Howard

Dec. 1 (BusinessDesk) - The New Zealand dollar was headed for a 0.6 percent weekly decline after business confidence fell and Finance Minister Grant Robertson said economic growth may slow next year.

The kiwi dollar traded at 68.30 US cents as at 5pm in Wellington from 68.46 cents late yesterday and from 68.64 cents a week ago. The trade-weighted index fell to 72.12 from 72.25.

The kiwi took a tumble on Thursday after the latest ANZ Business Outlook showed a net 39 percent of firms expect the economy to deteriorate over the next 12 months, the weakest level since early 2009. A speech today by Finance Minister Grant Robertson - who said there may be a slow-down of economic growth next year as the housing market cools and immigration is tightened - also weighed on the kiwi.

The kiwi "is certainly moving southward. The business confidence survey is still holding over the market while the USD is showing some resurgence on more optimism about the tax package," said Ross Weston, a senior trader at Kiwibank. While Robertson said growth may slow, the speech wasn't significant as most market players are already expecting that.

Looking ahead, Weston said the market is now waiting for any news on the US tax package. While the US dollar gained this week on optimism that it was likely to pass there are still obstacles. According to Reuters, the US Senate delayed voting on the Republican tax overhaul Thursday as the bill was tripped up by problems with an amendment sought by fiscal hawks to address a large expansion of the federal budget deficit projected to result from the measure.

The Senate debated the legislation late into Thursday and adjourned, putting off any votes until Friday morning. It was unclear if a decisive vote on the bill would occur then, Reuters said.

The kiwi fell to 50.47 British pence from 50.82 pence late yesterday. It fell to 57.35 euro cents from 57.69 cents, declined to 4.5181 yuan from 4.5215 yuan and rose to 76.88 yen from 76.65 yen. It traded at 90.31 Australian cents from 90.21 cents.

New Zealand's two-year swap rate fell 1 basis point to 2.12 while the 10-year swap rate was unchanged at 3.07 percent.

(BusinessDesk)

© Scoop Media