New Zealand dollar was trading steadily against its US peer on Tuesday, following the release of decent business confidence data out of New Zealand, but still the partial US government shutdown dominated market sentiment.
NZD/USD reached a session low at 0.8268 at 1:30 GMT, after which consolidation followed at 0.8309, gaining a mere 0.02% for the day. Support was likely to be found at October 1st low, 0.8246, while resistance was to be met at October 4th high, 0.8351.
According to data by the New Zealand Institute of Economic Research (NZIER), the gauge of business confidence in New Zealand rose to a value of 38 during the third quarter of the year from 32 in Q2. Seasonally adjusted data showed that the indicator advanced to 32 in Q3 from 30 in Q2.
In the mean time, market players used caution when approaching riskier currencies, such as the kiwi dollar, as the partial government shutdown in the United States continued to persist. US President Barack Obama challenged congressional Republicans to increase the nations debt limit by next week and said that he was willing to negotiate on fiscal matters once that is done and government funding is recovered. “We’re not going to negotiate under the threat of economic catastrophe,” Barack Obama said at the Washington headquarters of the Federal Emergency Management Agency, cited by Bloomberg.
Republican House Speaker John Boehner said earlier that the House will not support bills in favor of a complete re-activation of the government or raise the US debt limit unless agreement on spending cuts with the Democrats was reached.
Among investors concerns appeared that the stalemate in US Congress could go through October 17th, the date on which the nation loses its ability to borrow, unless the debt ceiling is lifted from its current level of 16.7 trillion USD. The United States has never before failed to raise the debt limit and by not making this crucial move, it risks plunging into the first default on its sovereign debt obligations ever.
Elsewhere, the kiwi dollar was lower against the Aussie, as AUD/NZD cross rose 0.16% to trade at 1.1376 at 6:36 GMT.