SINGAPORE- The New Zealand dollar made solid gains on Thursday in the wake of an upbeat business outlook survey, while the US dollar failed to sustain its bounce in the run up to a key US inflation reading at the end of the week.
Friday’s release of the core personal consumption expenditures (PCE) price index – the Federal Reserve’s preferred measure of inflation – headlines a week that’s otherwise been lacking on major market moving data, leaving currencies mostly rangebound.
Still, the kiwi was a notable outperformer in the Asian session, scaling an eight-month top $0.6295 after a survey out on Thursday showed New Zealand’s business confidence jumped in August to the highest level in a decade. It was last up 0.73 percent at $0.6291.
“Business confidence has lifted sharply in the wake of the Reserve Bank’s turnaround on monetary policy,” said Michael Gordon, a senior economist at Westpac in New Zealand.
The Reserve Bank of New Zealand had earlier this month delivered its first rate cut in over four years and signaled more to come.
“We wouldn’t suggest that a single OCR (official cash rate) cut could make this degree of difference to the economic outlook. Rather, we think this shows how downbeat firms had become earlier in the year,” said Gordon.
In the broader market, the dollar was struggling to find a floor, after having risen 0.48 percent in the previous session which analysts partially attributed to month-end demand.
The euro inched back toward its 13-month high and last bought $1.1135. Sterling rose 0.14 percent to $1.3209 and was not far from Tuesday’s peak of $1.3269, its strongest level since March 2022.
