Recent data releases from New Zealand may have added to the case for the Reserve Bank of New Zealand raising interest rates in the near future, but the ‘Kiwi’ maintained a bearish relationship with the majority of its peers during Australasian trading.
Although a measure of consumer confidence for New Zealand jumped to its highest level since the global economic crisis began in 2008, news that China’s manufacturing sector contracted in January dragged the New Zealand Dollar lower.
The ANZ consumer confidence index for New Zealand came in at 135.8 in January, up from 129.4 the previous month.
Earlier in local trading a separate report showed that New Zealand’s performance of manufacturing index slipped slightly from November’s positively revised 57.0 to 56.4, still well above the 50 mark separating growth from contraction.
Meanwhile, China’s HSBC/Markit Mfg PMI tumbled from 50.5 to 49.6. Economists had expected the measure to edge to 50.4 so the result came as something of a blow and dented New Zealand’s economic outlook.
The EUR/NZD exchange rate advanced further during European trading as the Euro was boosted by several better-than-expected PMI reports for the Eurozone and its largest economies.
Currency strategist Jane Foley issued this response regarding the European developments; ‘The data on manufacturing and services suggested the economic recovery in the Euro region is gaining traction. The outlook is positive for the Euro. A break above a key resistance of 1.3550 US Dollars alsi helped’.
Further EUR/NZD fluctuations could occur because of today’s consumer confidence report for the Eurozone but economists will also be looking to tomorrow’s credit card spending report for New Zealand.
If consumer confidence in the currency bloc improves as expected the Euro could extend gains before the close of European trading.
The Euro was also able to gain on the Pound and US Dollar during the local session, although EUR/GBP gains were slightly restrained as yesterday’s impressive UK employment data lent Sterling underlying support.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.3690 ,
Euro,,British Pound,0.8340 ,
Euro,,Australian Dollar,1.5171 ,
Euro,,New Zealand Dollar,1.6285 ,
Euro,,Canadian Dollar,1.4902 ,