Summary:
- Business confidence data for September comes in below expectations
- Profit expectations deteriorate to the lowest since 2009
- Kiwi dives on the news being the worst performing major currency this morning
The NZ dollar is by far the worst performing major currency this morning (-0.6% against the USD) after business confidence data for September disappointed across the board. The index measuring confidence slid to -53.5 from -52.3, while the index for activity outlook dropped to -1.8 from -0.5. At the same time, inflation expectations kept declining to 1.63% from 1.7% registered in August, and the outlook for future companies’ profits fell to the lowest since April 2009. In terms of the price outlook, we got nothing which could reassure the Reserve Bank of New Zealand. Namely, pricing intentions (it means how much various firms are willing to raise prices) are now the lowest since October 2016. Such an outcome could be a large disappointment for the RBNZ after the central bank cut its cash rate as much as 50 bps last month. Although the NZ dollar has suffered severe losses of late, it could be struggling in attempting to recover at least some of them given the gloomy economic outlook. To sum up, while the kiwi appears to be unlikely to witness much more weakness, it is equally unlikely to make a big leap ahead in the near-term.
The NZDUSD keeps hovering at around its crucial demand zone. Source: xStation5
Start investing today or test a free demo
Open real account TRY DEMO Download mobile app Download mobile appThe content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
