The New Zealand currency strengthened to a three-year high versus its major counterpart the US dollar after the New Zealand economy showed its business confidence surged to 14.2 during the month of April, compared with the previous drop by 8.7 in March.
Demand for the Kiwi has increased on speculation the Federal Reserve will keep the interest rates at their lowest level near zero, along with the NBNZ activity outlook jump to 29.5 in April from 14.7 last month.
Further, demand for the New Zealand dollar rose after Fonterra Cooperative Group Ltd. (which is the world’s largest dairy milk exporter in New Zealand) recorded its highest month for exports in March after 229,000 tones of its dairy products left New Zealand.
While the Reserve Bank of New Zealand is to announce its rate decision for April 28 at 21:00 GMT, analysts’ expect the Bank will keep the rates steady at its their level at 2.50%.
The focus ahead of Thursday remains on the US FOMC decision and Bernanke’s comments which will determine the movement into Thursday.
On Thursday the US will continue to provide critical data for markets and affect the dollar and kiwi accordingly. The US economy will release the gross domestic product for the quarter of January to March at 12:30 GMT that expected to expand by 1.8% compared with a previous 3.1% in the fourth quarter of 2010.
Personal consumption index will advance by 2.0% in the first quarter, from 4.0% increase the previous quarter, while the core personal consumption expenditure index is to jump to 1.2% from 0.4%.
Pending home sales will be released at 14:00 GMT and expected to show a rise by 1.0% in March from 2.1%.
Originally posted here
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