Today we have the release of the NZIER Business Confidence survey. The New Zealand economy has accelerated at an alarming pace in the first quarter of this year, resulting in 3 rate hikes by the Reserve Bank of New Zealand, in an attempt to prevent the economy from overheating. It appears the pace the economy has been growing at is, in fact, unsustainable and the RBNZ have successfully managed to scale back business confidence with high interest rates.
Investor Notes: NZIER Business Confidence Survey, 2200 GMT.
- The high currency, lower prices of export goods such as dairy and forestry goods and the decelerating property market have caused the drop in confidence.
- A survey by the ANZ Bank Business Outlook survey for June, showed an almost 10% drop in business confidence for the remainder of 2014.
- Rising interest rates have been responsible for the slowdown, which has been a calculated maneuver from the RBNZ.
- Less than 30% of firms believed they would see higher profits and even fewer companies plan to take on new employees over the coming year.
- Banc De Binary analysts predict that the NZIER Business Confidence report will be lower today, indicating a potential downward movement in the NZD/USD.