- Cameron Bagrie, ANZ Bank New Zealand chief economist
The NZD/USD currency pair is approaching a strong resistance around 0.8431 that will put 0.8543 on the map, and strong fundamental data from New Zealand as well as uncertainty surrounding future prospects of the world's largest economy are pointing at further appreciation of the pair.
On the back of economic strengthening and hawkish central bank's comments, confidence among New Zealand businesses continued its upward movement in February. According to the ANZ, a gauge of business confidence soared to 70.8 up from 64.1 a month earlier, hitting the highest since March 1994. The figure means that more than 70% of companies are optimistic about general business conditions within the country. The number of businesses expecting a pickup in their own business activity advanced to 58.5 from 53.5, while the percentage of respondents that expected an improvement in profitability and will hire more staff, rose as well.
With stable economic improvement, rising inflation expectations and a need for higher interest rates is adding more pressure on the RBNZ. Currently, vast majority of analysts believe the central bank will increase its key refinancing rate by 25 basis points in March, bringing an end to the three-year period of record-low borrowing costs.
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