Tuesday 15th January 2019
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The New Zealand dollar firmed ahead of business confidence data today expected to show a lift in sentiment since October.
The kiwi dollar, and Asian equity markets, fell late yesterday after weak December import data in China highlighted the weakness of the economy there. But early losses stabilised, with the S&P 500 stock index in the US recently down just 0.4 percent.
“Moves were relatively contained and FX majors remained within the ranges set in Asian hours,” Westpac said in a note to clients today.
“Soft Eurozone data did dampen EUR and markets pared GBP gains as markets prepared for the very likely defeat of May’s Brexit plan in parliament this week.”
The kiwi rose to 68.23 US cents at 8:30am from 68.07 cents late yesterday. The trade-weighted index rose to 73.73 from 73.54.
All eyes domestically are on the New Zealand Institute of Economic Research’s December quarter survey of business opinion due this morning.
Most investors are expecting a lift from the nine-year low reported for September in what BNZ yesterday described as the first “meaty” local data for 2019.
“This will help show whether the significant slowdown we saw in Q3 GDP was the start of something to be concerned about, or just a wobble in the context of still-OK growth. We suspect the latter,” the bank said in an outlook note to clients.
Internationally the focus remains on London where Prime Minister Theresa May’s Brexit plan may be defeated in a parliamentary vote Wednesday morning New Zealand time.
May has attempted to shore up support for the plan by saying a defeat will cause parliamentary paralysis and increase the risk of there being no Brexit.
Voters “can take no deal off the table by voting for that deal. If no deal is as bad as you believe it is, it will be the height of recklessness to do anything else," the brokerage quoted May as saying.
Westpac observed the most likely outcome remains “further delays and a continued lack of clarity.”
The kiwi was little changed this morning at 53 British pence, from 52.97 late yesterday. It rose to 59.49 euro cents, from 59.32.
Data in Europe overnight showed industrial production there contracted 1.7 percent in November, the weakest performance in three years.
Against the Australian dollar, the kiwi rose to 94.75 cents from 94.67 late yesterday. It rose to 73.73 yen from 73.59 yen, and to 4.6170 Chinese yuan from 4.5974.
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