New Zealand dollar continues to hold above 63 US cents

Daily Currency Update

The Kiwi dollar is steady this morning when valued against the Greenback trading at 0.6362 at the time of writing.  The New Zealand Dollar (NZD) traded sideways on Monday’s Asian session, finding strength on tentative optimism in the currency markets. Through the European session, however, the Kiwi dollar started to pull back lower as markets turned bearish. The Kiwi dollar did underperform against the other commodity currencies, seeing NZD/AUD back below 0.95 after reaching its highest level in a year at the end of last week.

Yesterday the Westpac McDermott Miller Consumer Confidence Index for December dropped to its lowest point in more than 30 years, adding to a growing list of indicators that are pointing to an economic slowdown. The index dropped by 12 points to 75.6 in December, the lowest point since the survey began in 1988. Westpac said the survey indicated that there are far more New Zealanders who are pessimistic about the economic environment than those who are optimistic. There had been particularly large increases in the cost of food, housing, and petrol prices over the past year. Many respondents expect bad economic times ahead, not just over the next 12 months but for the next five years.

Other second-tier indicators have pointed to slow down. BusinessNZ Performance of Services Index (PSI) for November was 53.7, down 3.4 points from October, and the lowest level of overall activity since April 2022. Last week, BusinessNZ Performance of Manufacturing Index (PMI) the seasonally adjusted PMI for November was 47.4, 1.7 points lower than in October. Looking ahead, today we will see the release of the Statistics New Zealand monthly Trade Balance figures and ANZ Business Confidence which is a leading indicator of economic health.