The NZD opens lower this morning largely due to a stronger US Dollar which made ground across the board after better than expected GDP Data. The Kiwi had earlier drifted lower in local trade after softer business confidence numbers released yesterday. The ANZ survey showed 30.9% of respondents expect business conditions to deteriorate over the next 12 months, compared to 24.1% from the previous survey. This is a reversal of recent momentum which had seen the number improve.
U.S GDP Beats Expectations
Economic growth in the U.S is slowing, but not by as much as expected. This mornings GDP data showed the U.S economy growing by an annualized 2.6% in the fourth quarter, better than the 2.2% the market had been expecting. Whilst the number was a positive surprise, is it still well down on the Q3 reading of 3.4%, and Q2 at 4.1%. The growth number has eased some concerns that the US economy was in for a significant slowdown. The Greenback received an immediate boost from the positive data sending most currencies lower including the NZD and AUD. Focus will turn to tomorrow mornings U.S ISM Manufacturing, and PCE price index numbers, for further clues on the state of the U.S economy.
Trade Negotiations Extended
U.S trade representative’s confirmed a move to formally suspend a scheduled tariff increase on Chinese goods “until further notice”. This followed on from President Trump’s decision to delay the deadline for a U.S – China trade deal, and continue on with the negotiations.
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