Home Daily Commentaries New Zealand dollar trades above US$0.61 cents

New Zealand dollar trades above US$0.61 cents

Brett Ottawa
Written by
Brett Ottawa

Brett Ottawa

OFXpert

Brett brings a wealth of experience, boasting more than 15 years in the foreign exchange market.

| Monday 19 February, 2024

Daily Currency Update

The New Zealand dollar is slightly stronger this morning when valued against the Greenback currently trading at 0.6106 at the time of writing. Last week New Zealand central bank governor Adrian Orr said policymakers still need to ensure that inflation expectations are contained, suggesting they won’t be signaling a pivot to interest-rate cuts anytime soon. While all measures of price pressures have declined, headline inflation at 4.7% remains more than twice the 2% midpoint of the Reserve Bank’s 1-3% target band, Orr told the New Zealand Economics Forum at Waikato University on Friday. Two-year ahead inflation expectations declined to a two-and-a-half-year low of 2.5% in the first quarter, the RBNZ said earlier this week. The RBNZ’s Monetary Policy Committee will deliver its first rate decision of the year on Feb. 28 with most economists expecting it to maintain the Official Cash Rate at 5.5%.
Looking ahead this week in New Zealand and today BusinessNZ will release the Performance of Services Index which is a survey of purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. On Thursday Statistics New Zealand will release the latest Trade Balance figures. Export demand and currency demand are directly linked because foreigners must buy the domestic currency to pay for the nation's exports. Export demand also impacts production and prices at domestic manufacturers. Finally on Friday we will see the release of Retail Sales figures for the quarter. Retail sales figures are the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

Key Movers

In the US U.S. consumer sentiment was little changed in February while one-year inflation expectations ticked up, a survey showed on Friday. The University of Michigan's preliminary reading on the overall index of consumer sentiment came in at 79.6 this month, compared to 79.0 in January. Economists polled by Reuters had forecast a preliminary reading of 80.0. The survey's reading of one-year inflation expectations edged up to 3.0% this month from 2.9% in January. Near-term inflation expectations are within the 2.3%-3.0% range seen in the two years prior to the COVID-19 pandemic. The survey's five-year inflation outlook was unchanged at 2.9% for the third straight month. The Bureau of Labor Statistics reported on Friday that the Producer Price Index (PPI) for final demand in the US rose 0.9% on a yearly basis in January. This reading followed the 1% increase recorded in December but came in above the market expectation of 0.6%. The annual Core PPI rose 2% in the same period, compared to December's increase of 1.8%. On a monthly basis, the Core PPI was up 0.5% following the 0.1% decline recorded in the previous month.

Expected Ranges

  • NZD/USD: 0.6000 - 0.6200 ▲
  • NZD/EUR: 0.5550 - 0.5750 ▼
  • GBP/NZD: 2.0350 - 2.0550 ▲
  • NZD/AUD: 1.0550 - 1.0750 ▲
  • NZD/CAD: 0.8150 - 0.8350 ▲

Written by

Brett Ottawa

OFXpert

Brett brings a wealth of experience, boasting more than 15 years in the foreign exchange market. He started his foreign exchange career with OFX more than a decade ago, as a private dealer catering to individual clients. He later transitioned to the corporate sector, assuming the position of Corporate Senior Relationship Manager. What truly excites Brett is the opportunity to engage with people, supporting their business growth and sharing in their successes.