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NZD/USD hovers above 3-week low despite improving NZ business confidence

Key points

  • NZD/USD trades in proximity to fresh three-week low
  • Fed Chair Powell says two more rate hikes likely this year
  • New Zealand businesses “cautiously optimistic” – ANZ survey

New Zealand’s Dollar largely shrugged off an ANZ Bank survey that showed business confidence in New Zealand had improved in June, while reaching its highest level since November 2021.

The NZD/USD pair remained pinned near a three-week low on Thursday, as the US Dollar maintained strong footing on rather hawkish remarks by Federal Reserve Chair Jerome Powell.

Speaking on a panel with ECB President Christine Lagarde, Bank of Japan Governor Kazuo Ueda and Bank of England Governor Andrew Bailey on Wednesday, Powell said two more rate hikes were likely by year-end. The Fed Chair did not rule out the possibility of a rate increase next month.

Meanwhile, the ANZ Bank survey showed a net 18% of respondents expected the economy to deteriorate over the next 12 months. Still, that compared with a 31.1% pessimism level in the prior survey in May.

Additionally, a net 2.7% of respondents in the survey expected their own businesses to expand over the next 12 months.

“June saw activity indicators lift in a reasonably broad-based fashion. While the levels of many are still subdued, firms appear to be cautiously optimistic that the worst may be over,” ANZ Chief Economist Sharon Zollner was quoted as saying by Reuters.

As of 7:35 GMT on Thursday NZD/USD was edging up 0.11% to trade at 0.6081. During the late phase of the Asian trading session, the major Forex pair went down as low as 0.6068. The latter has been the pair’s weakest level since June 8th (0.6032).

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