- The New Zealand dollar is moving higher in Asia on news Kiwi businesses were less gloomy in September.
- Business confidence had fallen to the lowest level since 2008 in August, a period when the economy was in recession.
- The Reserve Bank of New Zealand will announce its September interest rate decision on Thursday.
On an otherwise sleepy day in FX markets across Asia, one currency is on the move: the New Zealand dollar.
It’s bounced sharply against the US dollar and major crosses, helped by an improvement in business confidence in September after tumbling to recession-like levels in August.
ANZ Bank’s headline business confidence index bounced 12 points to -38%, indicating that a net 38% of businesses expect conditions to deteriorate in the year ahead.
While that sounds gloomy, it was actually an improvement after the index fell to the lowest level since April 2008 in August, a period when the New Zealand economy was in recession.
Although confidence still sits deep in negative territory, the improvement in sentiment — helped by short covering, given speculative positioning in the Kiwi is quite short — has helped to push the New Zealand dollar sharply higher in the aftermath of the release.
The NZD/USD is currently trading at .6675, up 0.45% for the session.
The bounce in sentiment may have been helped by news the New Zealand economy grew by 1% in the June quarter, the fastest expansion in two years.
The release also comes ahead of the Reserve Bank of New Zealand’s September interest rate decision on Thursday, a meeting where markets widely expect the bank to keep its overnight cash rate steady at 1.75%.
The full details of the ANZ survey can be found here.
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