NZD/USD price slipped on Thursday after the release of Federal Open Market Committee minutes. The pair was trading at 0.69902 which was 0.38% lower than the previous day.
New Zealand Economic Concerns
NZD/USD has been on a decline after the release of weak ANZ business confidence for June. New Zealand ANZ business confidence fell 3 points to 0.6%.
Compared to preliminary June results, activity indicators were a little changed at robust levels. Firm’s own activity stance was up 5 points to 32%.
Investment intentions rose 7 points to 25.5%. Capacity utilization was also up 4 points to 23.9%. Employment intentions eased 1 point and slipped to 19.7%.
Inflation pressures continue to spike. Cost expectations increased 5 points to 86.2% as 62.8% of respondents plan to hike their prices by 6 points. General inflation expectations rose to 2.41%.
Profit expectations were up 2 points while export intentions rose 1 point. Each came in at 5.8% and 13.4% respectively.
40.2% of firms expect credit to decline 2 points. Residential construction intentions as well as commercial construction intentions recorded large gains. The latter rose 31 points to 38.5% while the first went up 19 points to 40%. NZD/USD will react to the ANZ Business Confidence for July.
US Inflation Concerns
According to minutes released on Wednesday, the FOMC discussed tapering of monetary policies in their latest meeting. Some Fed members indicated that the US economic recovery was advancing faster than expected.
Some of the members seemed in a rush to taper its policies amid surging inflation pressures. However, many indicated that there was no need for a rush. According to the minutes, tapering would be considered if only the economy reflected further substantial progress.
During the meeting, the committee held short-term interest rates near zero. However, it also signaled an adjustment in its policies in the upcoming months. The Fed also kept its benchmark rate anchored between 0% and 0.25%.