The New Zealand dollar had a roller-coaster day, tossed around by various pieces of geopolitical news, but ended the local trading day little-changed from the open after a strong rebound in domestic business confidence.
The kiwi was trading at 64.22 US cents at 5.10 pm in Wellington, up from its low at 64.01 around midday, but barely different from 64.24 cents at 8.10am, while the trade-weighted index was at 71.24 points from 71.19.
The latest ANZ Bank survey found that although businesses remain pessimistic about the economy, they are becoming decidedly less so.
It found a net 26 per cent of businesses still expect business conditions to deteriorate in the next 12 months but that’s a good deal better than October’s reading of a net 42 per cent negative, and September’s 54 per cent.
A net 13 per cent are now expecting their own businesses will fare better over the next year compared with last month’s net 4 per cent expecting to fare worse, also the strongest reading this year.
“It was a better than previous business confidence numbers and an improved outlook so the kiwi took off,” said Mike Shirley, a dealer at Kiwibank, although the lift was only enough to recover ground lost earlier in the day as China-US tensions ratcheted up.
“We had word that Donald Trump had signed the Hong Kong legislation,” said Shirley.
Although the president had little option, given the overwhelming support in the US Congress for the bill supporting those in Hong Kong protesting about China’s role in the governing of the former British colony, “that was still viewed as a negative for US-China trade,” he says.
The signingcame after a senior US administration official said the long-awaited preliminary trade deal between the two nations was “millimeters away.”
The kiwi traded at 94.97 Australian cents from 94.72 from yesterday, at 49.68 British pence from 49.78 pence, at 58.36 euro cents from 58.34, at 70.29 yen from 70.12 and at 4.5139 Chinese yuan from 4.5185.
The two-year swap rate edged up to a bid price of 1.1195 per cent from 1.1124 per cent yesterday while 10-year swaps fell to 1.4550 per cent from 1.4575 per cent.
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