As analysts set annual growth in New Zealand at a healthy 3%, NZDUSD falls further on Tuesday.
From Monday’s loss of 0.9%, the kiwi is trailing more versus the greenback falling from the week’s start at 0.75323 to 0.74476.
A report from NZIER on the Quarterly Survey of Business Opinion sees the New Zealand recovery surging ahead as firms remain the most confident in 20 years. Data from NZIER Business Confidence Index (Q1) was reported at 23% versus previous of 24% as an indicator that rates the relative six-month business outlook.
Business confidence held steady in the March quarter, and remains at the highest level since mid-1994. The Survey notes, ‘Economic activity strengthened in early 2014, with trading activity, which closely mirrors GDP growth, accelerated to the fastest pace since December 2003 – when annual GDP growth was near 4.5%.’
Shamubeel Eaqub, Principal Economist at NZIER commented, “While we do not expect economic growth to hit such heady rates in the current business cycle, as credit conditions are very different now, our latest survey paints a clear picture: the recovery is strengthening.”
The survey also acknowledged that inflation is increasing with prices rising on consumer demand, allowing a prediction on a rise in interest rates under the pressure.
MT4 chart: NZDUSD
Begun in 1961, NZIER's Quarterly Survey of Business Opinion is New Zealand's longest running and most comprehensive business survey. The resulting indicators are a valuable tool for assessing the current state of the economy and forecasting short term economic activity.
The survey samples manufacturers, builders, architects, wholesalers and retailers, and service sector firms. Information from these industries provides useful indicators of future investment patterns, and the likely direction and composition of economic growth in coming quarters. Firms are surveyed regarding both their recent experience and expectations for the next three to six months.
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