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In New Zealand, economic figures are released early – Trade Balance is expected to turn negative – a deficit of 28 million is expected to follow a few months of surplus.
Later in New Zealand, the NBNZ Business Confidence is an important official release that always rocks the kiwi. It fell to 27.9 points last month, hurting the currency. To close the day, Building Consents, are released, and will show how the housing sector is doing.
For more on the New Zealand dollar, read the NZD/USD forecast.
The dollar hit a fresh 15-year low against the yen Tuesday, falling below Y84 as investors probed the determination of Japanese authorities to hinder their currency’s advance. The euro also hit a nine-year low against the yen, as the Japanese currency continues to soar. Losses in equity markets and nerves about the slow pace of global growth sent investors running to the traditional safe harbor.
The yen’s gains further stoked speculation that Japanese authorities will take action to combat yen appreciation, which hurts the country’s export-driven economy. The euro also fell to its lowest level against the dollar in roughly five weeks, and currencies tied to commodities, such as the Australian, New Zealand and Canadian dollars were all down sharply.
Vietnam devalued its currency by 2.1% against the dollar Wednesday, after the central bank reset the inter-bank exchange rate to 18,932 dong from 18,544 dong on Tuesday. The move announced late Tuesday, is part of efforts to control the trade deficit, the central bank said in a statement. Vietnam’s trade deficit rose to $980 million in July, bringing the cumulative deficit for the first seven months of the year to $7.26 billion, up from $3.65 billion a year earlier. Analysts said the devalued currency should help support Vietnamese exports, especially the price competitiveness of its low-valued-added products.
Exports to the ailing economies of Portugal, Italy, Ireland, Greece and Spain have suffered steep declines, according to a recent study. The falls underline the challenges facing the government, which hopes to rebalance the UK economy and use exports to drive future growth.
The study done by Close Brothers is based on public trade data and says that the value of UK exports to the five countries plunged by 16% to £9.2bn between the second quarter of 2008 and the first quarter of this year. The fall comes amid an 11% drop in the value of sterling against the euro.
