NZD steadfast as we move toward Christmas break
Daily Currency Update
The New Zealand dollar maintained a narrow range through trade on Wednesday bouncing between US$0.6270 and US$0.6297 for much of the domestic and overnight sessions. With little headline news flow on hand investors appeared content in consolidating recent gains and testing new four-month highs near US$0.63 before stronger-than-expected US consumer confidence and housing data spurred a late surge in US yields and weighed on the NZD. A US Conference Board Consumer confidence survey showed a surge in consumer sentiment. Higher stocks and falling Gas prices helped fuel increased confidence while existing home sales recorded their first monthly increase in 6 months. The improved data helped US yields add between 1-4 basis points across the yield curve forcing the NZD back below US$0.6270 and toward session lows just above US$0.6250.Our attentions turn now to US GDP data and unemployment claims ahead of Friday’s PCE inflation Index as the key macro drivers of direction into the Christmas Holiday period.
Key Movers
The British pound was the day's big mover, giving up more than half a per cent against the USD and sliding against other key majors following a sharper-than-anticipated decline in inflation pressures. November CPI data showed a larger-than-expected fall in both headline and core inflation. Services inflation, while still stubbornly elevated, also tracked lower down to 6.3% from 6.6% in October. well below Bank of England forecasts at 6.9%. The easing of price pressures all but rules out another rate hike. UK Gilt yields tumbled across both 2 and 10-year rates forcing the GBP back below 1.27 and 1.2650 toward intraday lows at 1.2626. The sterling sell-off helped fuel a small uptick in the USD DXY index, while USDJPY and EURUSD were little changed.Our attentions turn now to US GDP data and unemployment claims ahead of Friday’s PCE inflation Index as the key macro drivers of direction into the Christmas Holiday period.
Expected Ranges
- NZD/USD: 0.6180 - 0.6300 ▼
- NZD/EUR: 0.5650 - 0.5750 ▼
- GBP/NZD: 2.0050 - 2.0350 ▼
- NZD/AUD: 0.9250 - 0.9320 ▲
- NZD/CAD: 0.8310 - 0.8410 ▲