Home Daily Commentaries New Zealand dollar trades above US$0.61

New Zealand dollar trades above US$0.61

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 26 February, 2024

Daily Currency Update

The New Zealand dollar is stronger this morning when valued against the Greenback currently trading at 0.6173 at the time of writing. The NZD/USD pair delivered a solid recovery from the round-level resistance of 0.6200 in the late session on Friday. On the data front, NZ Retail sales fell in the last three months of 2023, with recreational goods and fashion hit hard. Stats NZ this morning said all seasonally adjusted retail sales in the December quarter amounted to $25 billion, down 1.9 per cent on the September quarter. The total value of seasonally adjusted retail sales was $30b, down by 1.5 per cent or $459m compared to the September quarter.
Looking ahead this week and all eyes will be on the monetary policy announcement by the Reserve Bank of New Zealand (RBNZ) on Wednesday. The central bank will hold its first policy meeting of the year on Wednesday and traders estimate a one-in-three chance it will lift the cash rate by a quarter of a percentage point to a 15-year high of 5.75 per cent. They ascribe a 61 per cent chance of that happening by May, and no monetary easing is factored in until October, when it is priced at just a 9 per cent probability. The RBNZ is an outlier because the annual pace of inflation is still more than twice the 2 per cent midpoint of its target range of between 1 per cent and 3 per cent. Meanwhile, the country’s jobs market remains tight. The jobless rate rose to 4 per cent in the December quarter, easily shy of the 4.2 per cent expected by economists.

Key Movers

On the US front, US jobless claims dropped to their lowest level in a month. Initial Jobless Claims for the week ending February 17 decreased by 12K to 201K, below estimates of 218K, and the previous week 213K. This suggests the labor market remains tight, usually seen as a sign that might pump inflation higher. In the meantime, business activity in the United States (US) moderated in February, according to the S&P Global report. The Services and Manufacturing PMI remained at expansionary territory, with the former printing 51.3 below estimates and January’s figures, while the latter expanded at a 51.5 pace, exceeding forecasts and last month’s 50.7. Therefore, the Composite Index dipped from 52 to 51.4.

The S&P 500 (SPX) index was broadly unchanged to close the session at 5,088.8. The Dow Jones (DJIA) climbed 0.16% to end at 39,131.53, while the Nasdaq (IXIC) lost 0.28% to finish at 15,996.82. The Technology Sector started off the day as the best-performing major S&P 500 sector on Friday, rising nearly 1% before falling back to end the day down 0.27%. Nvidia Corp. (NVDA) initially gained more than 3% on Friday to trade near $823.68 before pulling back in the back half of the trading day to finish at $788.17, up around 0.36% at the closing bell. The chipmaker had reported on Wednesday that earnings per share topped $5.16 versus the $4.64 forecast, while revenue climbed to $22.10 billion compared to the expected $20.62 billion.

Expected Ranges

  • NZD/USD: 0.6050 - 0.6250 ▲
  • NZD/EUR: 0.5550 - 0.5750 ▲
  • GBP/NZD: 2.0250 - 2.0450 ▼
  • NZD/AUD: 1.0450 - 1.0650 ▲
  • NZD/CAD: 0.8200 - 0.8400 ▼

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.