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Kiwi gains on rising business confidence

NZ NewswireNZ Newswire 31/05/2016 Jonathan Underhill

Kiwi gains on rising business confidence © Jack Atley/Bloomberg News Kiwi gains on rising business confidence The New Zealand dollar gained after a survey showed business confidence rose for a third month while strong Australian exports, building approvals, and business lending figures drove up the Aussie dollar, dragging the kiwi with it.

The kiwi rose to 67.29 US cents as at 5pm in Wellington, from 66.84 cents on Monday. The local currency fell to 92.84 Australian cents from 93.34 cents.

A net 11 per cent of firms surveyed in the ANZ Business Outlook in May were upbeat about the economy's prospects for the year ahead, up from 6 per cent in April, with the construction industry the most buoyant.

In Australia, figures showed lending to businesses rose 7.4 per cent in April, the fastest in seven years, outpacing mortgage lending.

Meanwhile, Australian first-quarter balance of payments figures showed net exports could add 1.1 percentage points to gross domestic product and building approvals unexpectedly climbed 3 per cent in April, against forecasts of a 3 per cent decline.

"ANZ business confidence was reasonably perky and the Aussies have had quite a trifecta" of strong data, said Graham Parlane, private client manager at OMF. "The kiwi and the Aussie are looking pretty well bid."

The Australian dollar rose to 72.47 US cents from 71.92 cents. Australia releases its first-quarter GDP report tomorrow.

More upbeat data on both sides of the Tasman may reduce the chances of central bank interest rate cuts in June.

The Reserve Bank of Australia holds its monthly policy review on June 7, while the Reserve Bank of New Zealand releases its full monetary policy statement on June 9.

The two-year swap rate rose a basis point to 2.29 per cent and the 10-year swaps rose 3 basis points to 2.9 per cent.

The kiwi rose to 60.43 euro cents from 60.20 cents on Monday and rose to 45.85 British pence from 45.73 pence. The New Zealand dollar rose to 74.81 yen from 73.84 yen on Monday and increased to 4.4278 Chinese yuan from 4.3991 yuan.

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