The New Zealand dollar is steady on Thursday, after considerable losses on Wednesday. In North American trade, NZD/USD is trading at 0.6507, down 0.07% on the day. On the release front, New Zealand released the annual budget. In the U.S., U..S Preliminary GDP came in at 3.1%, matching the forecast.
With the trade war between the U.S. and China in full swing, it’s no surprise that the business sector in New Zealand is deeply pessimistic about economic conditions. China is a major trading partner, with some 25% of New Zealand exports going to the Asian giant. The ANZ Business Confidence survey remains mired deep in negative territory. Still, the indicator moved slightly higher in May, good enough for a 3-month high. Meanwhile, the semi-annual RBNZ Financial Stability Report stated that financial risks had not increased since the last report in November. The bank circled high consumer debt and New Zealand’s exposure to global developments as the main points of concern.
The U.S. economy continues to perform well, as growth remains above the 3.0% level. The second estimate GDP showed a gain of 3.1%, matching the estimate. This was just shy of the initial estimate in April, which came in at 3.1%. The U.S. economy is firing on all cylinders while New Zealand’s growth has been dampened by the slowdown in China, a key trading partner. Investors are understandably wary about the kiwi, which has fallen below 0.65 on Thursday. Last week, NZD/USD touched a low of 0.6581, its lowest level since late October.
