The New Zealand Dollar is softer against the Pound and slipped lower against the US Dollar as concerns over the political situation in the USA and Europe weigh heavily upon market sentiment, negative Chinese manufacturing data came in worse-than-expected.
The potential losses were muted however after New Zealand business confidence data soared to a new five-year high. In a separate survey the ANZ Business Outlook survey, 54% of firms expect business conditions in the country to improve over the next year. The figure climbed from the 48.1% recorded in August. The figure is the highest recorded since 1999.
The ‘Kiwi’ came under pressure after the US Republicans and Democrats failed to agree on raising the nation’s debt ceiling in order to avoid a shutdown of the Federal government. A decision has to be made by midnight tonight but the impasse shows no signs of abating as both sides vowed to not budge over controversial health laws.
“If agreement cannot be reached, the US could default on its debt the US fiscal issues are negative for global risk appetite, and should therefore hurt NZD/USD in the near term,” said Imre Speizer, senior market strategist at Westpac Banking Corp.
Political uncertainty in Europe is also affecting demand for riskier commodity based currencies like the ‘Kiwi’ as the Italian government faces the prospect of collapse as infighting between supporters of Silvio Berlusconi and other coalition members threatens the governments stability, Prime Minister Enrico Letta called for a confidence vote to be held on October 2nd in a bid to save his government.
Weaker than expected manufacturing data out of China also weighed upon sentiment. China is New Zealand’s biggest trade partner so any negative data results from that nation weighs upon the ‘Kiwi’.
This week is scarce for New Zealand specific data so any movements of the currency will depend on external factors.
Current New Zealand Dollar (NZD) Exchange Rates:
The New Zealand Dollar/US Dollar Exchange Rate is currently in the region of: 0.8278
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5129
The US Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.2080
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9495
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6308
The Australian Dollar/New Zealand Dollar Exchange Rate is currently in the region of: 1.1251
(Correct as of 10:05 am GMT)
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