-Cameron Bagrie, ANZ chief economist
The New Zealand Dollar strengthened versus its American counterpart ahead of rate announcements from the RBNZ and Fed, which are both likely to keep rates steady. During the Asian trade session, the kiwi added 0.25% to trade at 79.37 US cents. The New Zealand Dollar's reaction to central banks' announcements is seen to be muted.
Meanwhile, confidence among the country's businesses rose to the highest level in three months in October, rebounding from a two-year low. ANZ Business Confidence Index soared to 26.5 up from 13.4 a month earlier, with a figure above zero shows optimists outweigh pessimists. However, firms expectations for an improvement in their own activity rose marginally to 37.8% from 37% in September. The data also showed a net 54% of firms expect interest rates to increase further, compared to 50.6% last month. Inflation expectations were little changed at 2.48% from 2.46% with a net 24.2% seeing to raise prices, up from 19.2% last month. A net 25% expected to increase exports, up from 22.1% last month. Meanwhile, companies' expectations for profits dropped, with a net 17.2% anticipating higher earnings, down from 19.2% a month earlier. Those intending to hire more staff also fell to 19.4% from 21.3%, while increased investment intentions weakened to 16.3% from 20.3%.
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