Home Daily Commentaries NZD resilient in face of ongoing China worry

NZD resilient in face of ongoing China worry

Daily Currency Update

The New Zealand dollar has shown a surprising level of resilience through the last 24 hours, holding up in the face of a broadly stronger USD and elevated China pessimism. The NZD held steady around 0.5960 through trade on Monday amid growing concern for China’s property market. China’s second largest property developer Evergrande is again in the headlines after it abandoned a debt restructuring plan when it was revealed property sales were worse than expected and an ongoing investigation into its subsidiaries prevented it from issuing new bonds. Its share price plunged following the announcement, prompting a sell off across the industry and the broader Asian market. Both the Hang Seng and China’s CSI index closed the day lower, weighing on the Yuan and in turn the NZD. Having slipped below US$0.5950 the NZD pared early losses through the overnight session pushing back toward US$0.5960/70 despite a broadly stronger USD.
Our attentions turn now to commentary from Key Fed officials ahead of US new home sales data and key consumer confidence report.

Key Movers

The USD dollar continued its upward march through trade on Monday, buoyed by an ongoing sell off across the global bond market, spurred by elevated risk aversion and rising uncertainty surrounding China’s property market. The USD DXY index pushed above 106 for the first time this year as the Euro, Pound and Yen all moved lower. The Yen continues to suffer following last week's dovish BoJ update and sustained uptick across global rates. Us treasury yields marked a 16 year high overnight forcing the yen toward 149. With the Euro trading below 1.06, the GBP giving up 1.22 and a collapse across industrial metals weighing on commodity currencies and the USD appears well placed to maintain its near-term advantage.
Our attentions turn now to commentary from Key Fed officials ahead of US new home sales data and key consumer confidence report.

Expected Ranges

  • NZD/USD: 0.59 - 0.6020 ▼
  • NZD/EUR: 0.5580 - 0.5680 ▲
  • GBP/NZD: 2.0380 - 2.0620 ▼
  • NZD/AUD: 0.9220 - 0.9320 ▲
  • NZD/CAD: 0.8000 - 0.8100 ▲