New Zealand Report Show Sharp Drop in Business Confidence
Forex traders took advantage of the U.S. bank holiday on Monday by driving the U.S. Dollar sharply lower against a basket of major currencies. Short-sellers continued to feed on the previous week’s downside momentum, driving the March U.S. Dollar Index futures contract into multi-year lows.
It was a light report day on Monday. Japanese Preliminary Machine Tool Orders came in higher than expected at 48.3% and the Euro Zone Trade Balance came in as expected at 22.5 Billion.
In the U.K., Silvana Tenreyro, a member of the bank’s monetary policy committee warned the uncertainty caused by Brexit is deterring companies from investing and hampering Britain’s ability to close its productivity gap with other leading developed countries.
Also on Monday, Bank of Japan Governor Haruhiko Kuroda offered a positive view on the economy and inflation. The BoJ offered its most optimistic view on regional areas of Japan in nearly a decade in a quarterly report, underscoring its conviction a broadening recovery will help accelerate inflation to its ambitious 2 percent target.
Kuroda said in a speech to BoJ regional branch managers that core consumer inflation was “moving around 1 percent,” a slight change from three months ago when he said core consumer prices were around zero.
“The economy is expected to continue expanding moderately,” Kuroda added, reiterating his optimism on prospects for a sustained recovery.
Early Tuesday, a report from New Zealand called the NZIER Quarterly Survey of Business Opinion showed a sharp drop in business confidence following the General Election, with a net 11 percent of businesses expecting economic conditions to deteriorate over the first half of 2018. Business confidence had fallen in the previous quarter ahead of the General Election, and it appears uncertainty over new Government policies have made businesses even more downbeat.
Also on Tuesday, Japanese Finance Minister Taro Aso said that the did not see problems with the dollar hovering around 110.80 yen, but that big swings in currencies would be problematic. In other news, Japanese PPI came in a disappointing 3.1%. Traders were looking for an increase of 3.3%.
Japanese Tertiary Industry Activity, however, came in higher than expected, posting a 1.1% gain versus a 0.4% forecast.
Finally, in Australia, New Motor Vehicle Sales rose 4.5%, well-above the previous 0.2%.
This article was originally posted on FX Empire