NZD/USD extends losses as ANZ's Business Confidence hits lowest since April 2008
|- NZD/USD hits session lows below 0.6280 on weak ANZ business confidence data.
- The forward-looking indicator shows a weakening of inflation expectations.
- A below-forecast China PMI could strengthen the bearish pressure around the NZD.
The already weak NZD/USD extended losses after Australia New Zealand Bank's (ANZ) Business Confidence fell 2 points to -54%, the lowest level since April 2008.
The NZD/USD pair was trading 10 pips lower at 0.6284 before the data was released at 00:00 GMT. As of now, it is trading at a session low of 0.6277.
While the Business Confidence deteriorated, the actual reading was far better than the consensus estimate of -58.5. The ANZ Activity Outlook (Sep) also fell to 1.8% from the preceding month's 0.5% but bettered the estimate of -3.5%.
So far, however, markets haven't taken heart from the fact that key figures have bettered estimates, possibly because the forward-looking sub-heads of the Business Confidence are pointing to tough times ahead.
For instance, firms’ expectations for their own activity over the year ahead fell 1 point to -2, the fourth fall in a row, and the lowest read since April 2009.
Inflation expectations fell from 1.70% to 1.63% – they have fallen half a percent this year to be well under the 2% CPI target midpoint.
Looking forward, NZD/USD will likely suffer deeper losses if China's NBS Manufacturing PMI (Sep) and Caixin Manufacturing PMI miss estimates by a big margin, bolstering fears of deeper economic slowdown and triggering risk aversion.
Technical levels
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