New Zealand dollar holds above 59 US cents
Daily Currency Update
The Kiwi dollar is slightly stronger this morning when valued against the Greenback. The New Zealand Dollar staged a recovery against the US Dollar ahead of the weekend as investors' sentiment improved, while the Greenback is trading soft, undermined by a fall in US Treasury bond yields. The NZD/USD is currently trading at 0.5951 at the time of writing after bouncing from a daily low of 0.5919. On the New Zealand data front last week New Zealand's economy expanded 0.9% during the second quarter, following 0% in the previous reading. Annually, the second-quarter GDP expanded by 1.8%, compared with the 2.2% growth in Q1 while beating estimates of a 1.2% increase. On Friday consumer confidence weakened in the third quarter regarding the economic outlook, with the index falling to 80.2 from 83.1. The agenda revealed the Trade Balance showed an improvement in the annual trade deficit to $15.54B for August $-1588B from prior figures. NZD crosses were stronger, notably NZD/GBP to 0.4870, taking its weekly gain to 2.2%. AUD had a flat week around 0.6440, seeing NZD/AUD break up through 0.9250. A very quiet week ahead in New Zealand. With all eyes on the ANZ Business Confidence a survey of about 1,500-2,000 businesses asks respondents to rate the relative 12-month economic outlook.Key Movers
On the data front last week the Federal Reserve (Fed) opted to maintain interest rates within the 5.25-5.50% range. Fed Chairman Jerome Powell, in a subsequent press conference, reiterated the Fed's commitment to achieving a 2% inflation target. Powell also mentioned that the Fed is prepared to raise rates if deemed necessary. The Fed's hawkish stance could exert pressure on the Australian and New Zealand dollar. On Friday the S&P Global Manufacturing PMI improved to 48.9 from 47.9 a month earlier, exceeding estimates but remained in contractionary territory, while the Services PMI dipped to 50.2 from 50.5 in July, below forecasts. The Composite reading, which offers a general view of business activity, was aligned with estimates at 50.1 but trailed August’s 50.2. The weekly US Initial Jobless Claims dropped to 201K, the lowest level since January. Meanwhile, the Philly Fed dropped to -13.5 in September from 12.0 in the previous reading, worse than expected at -0.7. Existing Home Sales fell to 4.04M MoM in August from the previous reading of 4.07M.On Friday the USD/JPY closed out the trading week just south of the 148.50 level after peaking at an intraday high of 148.40. The Bank of Japan (BoJ) remained dovish maintaining its ultra-easy policy stance even in the face of higher-than-expected reported Consumer Price Index (CPI) inflation earlier in the day at 3.2% y/y and the core rate running at 4.3%, well above the 2% target. Inflation in the Japanese economy is on the high end for the time being, but price growth is expected to decline appreciably in the coming months, and the BoJ continues to be far off of a hawkish policy change.
Expected Ranges
- NZD/USD: 0.5850 - 0.6050 ▲
- NZD/EUR: 0.5500 - 0.5700 ▲
- GBP/NZD: 2.0420 - 2.0620 ▼
- NZD/AUD: 1.0700 - 1.0900 ▼
- NZD/CAD: 0.7925 - 0.8125 ▼