Home Daily Commentaries Kiwi dollar buoyed by weaker US Dollar

Kiwi dollar buoyed by weaker US Dollar

Matt Richardson
Written by
Matt Richardson

Matt Richardson

OFXpert

Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange.

| Thursday 4 April, 2024

Daily Currency Update

The New Zealand dollar advanced through trade on Wednesday, buoyed by a broad based USD sell off. Softer-than-anticipated US ISM services data allowed the NZD to consolidate and extend through US$0.6000 to mark intraday highs at US$0.6011. With little of note on the domestic docket, the NZD was at the mercy of offshore stimuli and with the USD struggling to gain any traction on rising yields early in the session the softer services print and reversal in yields was enough to encourage markets to drive the USD lower. We have seen some decoupling in USD and yield performance in recent sessions as market pricing for Fed rate cuts remains steady. Markets are pricing a 50/50 chance of a rate adjustment in June and 71 points of cuts into the end of the year. The NZD will remain vulnerable to changes in this timeline and our attentions now turn to domestic building and construction permits ahead of US jobless claims tonight and non-farm payroll numbers Friday for guidance and direction.

Key Movers

The US dollar underperformed through trade on Wednesday following weaker-than-anticipated ISM services data. US Treasury yields tracked higher through the early part of the trading session following a stronger-than-expected ADP employment change print. Data showed a 184,000 jump in private payrolls in March, well above the 150,000 anticipated and another indicator the labour market remains resilient. The USD edged higher before a softer ISM services report forced a retracement. Services data printed well short of market estimates, driving the USD lower and forcing the DXY index to give up half a percent. The euro jumped through 1.08 marking session highs at 1.0837 despite a greater-than-expected softening in inflation pressures. Eurozone CPI printed 0.1% below consensus estimates, supporting calls the ECB will cut rates in June. Our attention turns to ECB March meeting minutes today for further forward guidance as to the timing and trajectory of rate adjustments.

With the USD on the back foot, Sterling rallied back above 1.2650 while the yen pushed back on attempts to break above 152 forcing the USD back toward 151.50. Our attentions turn now to European Area PMI’s and US jobless claims as key markers ahead of tomorrow's non-farm payroll print.

Expected Ranges

  • NZD/USD: 0.5950 - 0.6050 ▲
  • NZD/EUR: 0.5500 - 0.5600 ▲
  • GBP/NZD: 2.0980 - 2.1150 ▼
  • NZD/AUD: 0.9100 - 0.9200 ▼
  • NZD/CAD: 0.8050 - 0.8150 ▲

Written by

Matt Richardson

OFXpert

As a Senior Corporate Client Manager, Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange. Matt has clients who he has been working with for over a decade, a testament to his knowledge and dedication in the field. Matt is also a regular contributor on Ausbiz, offering clear and precise updates on currency market trends, showcasing his ability to interpret complex financial data into actionable insights.