New Zealand dollar finds support below 61 US cents
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Daily Currency Update
The New Zealand dollar is slightly stronger this morning when valued against the Greenback, currently trading at 0.6079 at time of writing. NZDUSD has broken out of the bottom of a long-term range and despite reaching oversold extremes, is tipped to go even lower. On the data front, New Zealand Westpac Consumer Confidence rose from 88.9 to 93.2 in Q1, marking its highest level in over two years. Despite this rise, the index continues to hover below the pivotal 100 mark, indicating a prevailing pessimism among New Zealanders regarding economic conditions. Present Conditions Index saw a significant uplift from 77.1 to 85.1, while the Expected Conditions Index advanced modestly from 96.7 to 98.6. Looking ahead today, we will see the release of the quarterly Gross Domestic Product (GDP) which is expected to grow 0.1% QoQ. An upbeat GDP data would allow the Reserve Bank of New Zealand (RBNZ) to maintain interest rates higher for longer. However, a decline in GDP figures would suggest the New Zealand economy is in a technical recession. The RBNZ would be in trouble as it will be needed to create a balancing act between high inflation and vulnerable economic prospects.Key Movers
US Federal Reserve officials signalled that they still expect to cut their key interest rate three times in 2024, despite signs that inflation stayed surprisingly high at the start of the year. Yet they foresee fewer rate cuts in 2025, and they slightly raised their inflation forecasts. After ending their latest meeting, the officials kept their benchmark interest rate unchanged for a fifth straight time. It comes after the Reserve Bank of Australia held the cash rate at 4.35 per cent. The Fed's policymakers now foresee three rate cuts in 2025, down from four in their December projections. They expect “core” inflation, which excludes volatile food and energy costs, to still be 2.6 per cent by the end of 2024, up from their previous projection of 2.4 per cent. In January, core inflation was 2.8 per cent, according to the Fed's preferred measure.The Dow Jones Industrial Average (DJIA) is up nearly a full per cent on Wednesday and etching fresh all-time peaks after investors found the buy button following the Federal Reserve's (Fed) latest rate call, which saw the US central bank hold rates at 5.5% as investors had broadly expected. The Dow Jones drifted into an early low near 39,000.00 on Wednesday before recovering into 39,160.00. The S&P 500 closed at a record high above 5200 points. The Nasdaq Composite leapt more than 1 per cent in the final two hours.
Expected Ranges
- NZD/USD: 0.6000 - 0.6200 ▲
- NZD/EUR: 0.5450 - 0.5550 ▲
- GBP/NZD: 2.0900 - 2.1100 ▼
- NZD/AUD: 1.0700 - 1.0900 ▲
- NZD/CAD: 0.8100 - 0.8300 ▲