The New Zealand dollar tumbled today, pushed down by very poor macroeconomic indicators. Not everything in today’s report was bad, but the data was negative enough to cause a massive slump of the currency.
Building consents dropped 4.6 percent in May following the 1.9 percent increase in the previous month. Yet the seasonally adjusted number of new dwellings, excluding apartments (apartment number tends to strongly fluctuate from month to month), rose at the same rate, reaching the highest level since December 2007.
The ANZ business confidence index sank from 53.5 in May to 42.8 in June. Yet this report too was not completely pessimistic, saying:
Optimists continue to well outnumber pessimists but business confidence and other survey measures are sliding.
While today’s reports were not completely bad, they followed Friday’s worse-than-expected economic data, making traders question if the Reserve Bank of New Zealand will be able to continue its cycle of interest rate increases.
NZD/USD sank from 0.8776 to 0.8739. and NZD/JPY tumbled from 88.8 to 88.58 as of 10:52 GMT today. EUR/NZD jumped from 1.5530 to 1.5621.
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