NZ dollar climbs over 83 US cts on improving business confidence, less dour Australian capex outlook

Thursday 28th February 2013

The New Zealand dollar climbed back above 83 US cents after a bank survey showed local business confidence has continued to improve, and as Australian capital expenditure figures weren't as bad as investors were prepared for.

The kiwi rose to 83.15 US cents at 5pm in Wellington from 82.43 cents at 8am and 82.42 cents yesterday. The trade-weighted index advanced to 75.97 from 75.49 yesterday.

New Zealand's currency rallied after the ANZ Business Outlook showed business confidence rose to a 19-month high this month and firms were more optimistic about their own activity. It got another boost from Australian government figures which showed the fall in capital spending wasn't as sharp as people had feared. The kiwi rose to 80.90 Australian cents from 80.61 cents yesterday.

"The kiwi got a lift first on the ANZ survey, and then on the capex report," said Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney. The kiwi has been in an "82 US cents to 85 cents range over this year, and we're just staying in the middle of it."

New Zealand government figures today showed a 0.4 percent fall in building consents issued last month due to a drop in the number of apartment permits approved. Stripping out apartments, which is typically volatile, consents advanced a seasonally adjusted 9.6 percent.

The figures come ahead of tomorrow's fourth-quarter terms of trade, which is expected to show an improvement in the measure of how much imports can be bought with a fixed quantity of exports of 1.3 percent from negative 2.2 percent.

The kiwi rose to 76.78 yen from 75.75 yen yesterday after Japanese Prime Minister Shinzo Abe nominated Asian Development Bank president Haruhiko Kuroda to head up the Bank of Japan.

The local currency rose to 63.25 euro cents from 63.12 cents yesterday as investors continue to wait and see how the Italian election will play out for the rest of the region. It was little changed at 54.50 British pence from 54.55 pence yesterday.

BusinessDesk.co.nz

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