The New Zealand dollar traded either flat or lower against its most-traded peers today, though it managed to gain on few currencies, like the US dollar and the Japanese yen. The kiwi was soft despite the news about the lockdown easing in Auckland.
The headline ANZ business confidence indicator was at -41.8% at the end of August, relatively little changed from the reading of -41.4% registered in the first half of the month. It was a significant drop from the previous month’s figure of -31.8%, though. The report commented on the result:
Overall, business sentiment and activity expectations have held up better than one might expect, to take a glass half-full view of things. The largest falls were in experienced activity, perceived credit availability, how busy firms say they are (capacity utilisation), and cost expectations. Smaller falls were seen for employment intentions, export intentions, profit expectations and employment versus a year earlier. And there was little change over the month for headline business confidence, firmsâ own activity outlook, investment intentions and pricing intentions.
The report noted that the situation in Auckland was different due to the surprise surge of coronavirus cases and the resulting lockdown:
However, Auckland businesses are much more downbeat than elsewhere, particularly regarding current activity, unsurprisingly, but also the outlook.
Talking about Auckland, the government decided to lower the lockdown level in New Zealand’s largest city to 2, like in the rest of the country. The city entered level 3 lockdown after the surge of infection, and the government decided last week to prolong stricter restrictions to avoid the virus spreading across the rest of the country. Prime Minister Jacinda Ardern explained:
Our testing shows that it is highly unlikely there is Covid anywhere else in the country and we want to keep it that way. The last thing we want from re-opening Auckland is to spread the virus around the country, and that is one of the reasons we continue to have level 2 settings across New Zealand.
The government will review the lockdown settings for all regions at the end of the week.
NZD/USD rose from 0.6728 to 0.6748 as of 16:29 GMT today. NZD/JPY climbed from 70.83 to 71.41, reaching the high of 71.70 intraday. EUR/NZD was at 1.7694 after opening at 1.7676 and rising to the daily high of 1.7740. AUD/NZD was up from 1.0928 to 1.0948, bouncing from the daily low of 1.0909.
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