NZD/USD trades steadily as NZ business confidence rises to 15-year highs

New Zealand dollar traded steadily against its US counterpart on Thursday, after a survey showed that business confidence in New Zealand rose to almost 15-year highs in November, while the greenback was supported by another survey pointing strong consumer sentiment in the United States.

NZD/USD touched a session high at 0.8178 at 5:05 GMT, after which consolidation followed at 0.8154, gaining 0.07% for the day. Support was likely to be found at November 27th low, 0.8116, while resistance was to be encountered at November 27th high, 0.8212.

According to results in a survey by the National Bank of New Zealand (NBNZ), encompassing 1 500 companies in the country, the gauge of business confidence, based on these results, advanced to a reading of 60.5 in November, or the highest point in almost 15 years, from a value of 53.2 in October. The survey focuses on forecasts for business development in New Zealand during the next 12 months. This improved performance of the index provided a certain support to kiwis demand.

This news came one day after it became clear that New Zealand’s trade balance, an indicator reflecting the difference between nation’s exports and imports, produced a lesser deficit in October compared to what had been anticipated by experts and also in comparison with a month ago. The deficit figure narrowed to 0.168 billion NZD in October, while preliminary estimates pointed a deficit at the amount of 0.350 billion NZD. September’s result has been revised down to a deficit of 0.216 billion NZD from a deficit of 0.199 billion NZD previously.

Meanwhile, the US dollar gained appeal yesterday after a report by Thomson Reuters and the University of Michigan revealed that the final reading of the gauge of consumer sentiment in the United States climbed to 75.1 in November from a final value of 73.2 in October. Expectations pointed an increase to 73.1 in November compared to the preliminary reading of 72.0, published on November 8th, which was also the lowest point since December 2011.

Additionally, also yesterday the Department of Labor reported that the number of initial jobless claims in the US, an indicator for lay-offs in companies, dropped by 10 000 to reach 316 000 during the week ending on November 23rd 2013, confounding preliminary estimates pointing that claims will climb to 330 000. The number of claims in the preceding week has been revised up to 326 000 from 323 000 previously.

Today trading volumes are expected to remain thin, as markets in the United States are closed for Thanksgiving holiday.

Elsewhere, the kiwi was trading lower against the Aussie, with AUD/NZD cross advancing 0.43% on a daily basis to trade at 1.1195 at 7:55 GMT. A report showed that private capital expenditures in Australia expanded 3.6% in the third quarter of the year compared to the second quarter, after another 1.6% gain in Q2. Experts had anticipated that investment activity will shrink 1.2% in Q3. Companies in the country may probably reduce their expenditures by 2% during the fiscal year ending on June 30th compared to the same period a year ago. According to the report, nations economy was developing at a faster pace than expected, as this may also diminish the probability that the Reserve Bank of Australia (RBA) will introduce further cuts in its benchmark interest rate from the already record low level of 2.50%.

In addition, the Housing Industry Association (HIA) said that new home sales in Australia fell 3.8% in October compared to September, following a 6.4% increase during the previous month.

EUR/NZD pair was gaining 0.20% to trade at 1.6700 at 7:57 GMT.