New Zealand Dollar (NZD) Exchange Rate Supported by Services Report
At the close of Australasian trading the New Zealand Dollar was in a stronger position against the British Pound and the US Dollar.
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Although risk-aversion returned in the wake of violence in both Vietnam and Ukraine, the ‘Kiwi’ was buoyed by a positive domestic report.
New Zealand’s performance services index rallied from a positively revised 58.5 to 58.9 in April, pushing further above the 50 mark separating growth from contraction.
The measure was at its highest level for over two years, with gains led by rising sales and new orders. All of New Zealand’s regions produced an above 50 result, with the Central region’s gauge hitting 60.
The national index was up from a reading of 55.4 in the same period of the previous year.
This report was swiftly followed by government figures revealing a more rapid than anticipated increase in producer prices.
The ‘Kiwi’ climbed against the Pound as the inputs producer price jumped by 1.0 per cent in the first quarter following a 0.7 per cent decline in the fourth quarter of 2013.
Economists had expected a 0.4 per cent gain.
New Zealand’s outputs producer prices were up 0.9 per cent in the first three months of the year, exceeding estimates for a 0.7 per cent gain reversing the previous quarter’s 0.4 per cent decline.
The surprising data prompted this response from foreign exchange dealer Michael Johnston; ‘The PPI was a little bit higher than expected and pulled the Kiwi up of its lows. The Kiwi will fall in the medium term, but in the short term it’s pretty well-bid with New Zealand interest rates relative to elsewhere.’
According to a survey conducted by BusinessDesk, the majority of strategists are anticipating a neutral trading week for the New Zealand Dollar.
However, volatility in the commodity-driven currency could occur as a result of New Zealand’s net migration data, credit card spending figures and consumer confidence index.
The publication of minutes from the Reserve Bank of Australia and China’s manufacturing PMI will also be of particular interest.
Of course volatility in the NZD/GBP pairing could also be inspired by UK retail sales, inflation and growth data.
The publication of minutes from the latest Federal Open Market Committee meeting could impact the USD/NZD exchange rate.
The New Zealand Dollar is currently trading against the Pound in the region of 0.5138 and is trading against the US Dollar in the region of 0.8639.