WELLINGTON: The New Zealand dollar fell after a survey showed deteriorating business confidence and it may decline further with key events next week.
THE Kiwi dollar fell to US65.88 cents as at 5pm on Friday from 66.39 cents on Thursday. The trade-weighted index fell to 70.31 from 70.74.
Business confidence fell to a six-year low this month, according to the ANZ Business Outlook, with construction firms and manufacturers becoming more gloomy and agricultural businesses remaining the most pessimistic.
The survey adds to expectations the Reserve Bank of New Zealand will cut interest rates again this year in the face of weak dairy prices and deteriorating external position and after governor Graeme Wheeler said the bank remains in easing mode.
Also, with data showing an accelerating US economy, the greenback has been broadly stronger.
“Next week is a big week domestically with the dairy auction, employment data and Fonterra (board) meeting – on all three the market is braced for negative news,” said Robert Rennie, chief currency strategist at Westpac Banking Corp.
“Traders have started to look into next week’s event risk and that’s seen the New Zealand dollar under-perform,” he said.
The local currency traded at 90.20 Australian cents from 90.66 cents on Thursday and dropped to 60.319 euro cents from 60.46 cents. It fell to 42.18 British pence from 42.54 pence and declined to 81.65 yen from 82.36 yen. It was at 4.0904 yuan from 4.1194 yuan. Two-year swaps held at 2.88 per cent and five-year swaps at 3.16 per cent.
