The New Zealand dollar extended its decline after business confidence fell, Chinese data was softer than expected and Prime Minister Jacinda Ardern confirmed that foreign speculators will no longer be able to buy houses in New Zealand from early next year.
The kiwi fell to 68.45 US cents as at 5pm in Wellington from 68.72 US cents as at 8am in Wellington from 68.58 cents late yesterday. The trade-weighted index fell to 72.61 from 72.78 yesterday.
Business confidence fell to a net 10 per cent of firms negative about the year ahead, from a net zero reading with as many pessimists as optimists in September, according to the ANZ Business Outlook. In seasonally adjusted terms, business confidence fell to a net 8 per cent negative from a net 16 per cent positive. The bulk of responses were collected before the new government was formed "so this month's survey primarily covers the uncertainty around the outcome and not the outcome itself. The latter will be next month's story," said ANZ Bank New Zealand chief economist Cameron Bagrie.
Westpac Banking Corp strategist Imre Speizer said the survey pushed the dollar lower as "business confidence showed quite a pullback."
He also said news that China's official Purchasing Managers' Index fell to 51.6 in October, compared with 52.4 in September weighed on the kiwi as did the announcement the new government is introducing an amendment to the Overseas Investment Act to classify residential housing as "sensitive". This means non-residents or non-citizens can't purchase existing residential dwellings. Australians will be exempt as New Zealanders are in Australia, according to Ardern.