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 12 February, 2024

Daily Currency Update

The New Zealand dollar is stronger this morning when valued against the Greenback currently trading at 0.6109 at the time of writing. The Kiwi dollar rallied to a near high of 0.6130 on Friday. The Kiwi dollar strengthened on the back of hawkish comments by the Reserve Bank of New Zealand (RBNZ) lifting interest rates further due to persistent price pressures and steady labor demand. Analysts at ANZ see the RBNZ raising its Official Cash Rate (OCR) by 25 basis points (bps) in February and April, taking the policy rate to 6%. The underperformance of the US dollar against the New Zealand dollar is likely as the Federal Reserve (Fed) is done hiking interest rates and is now watching inflation closely to begin rate cuts. The fourth-quarter labor market data from New Zealand surpassed the expectations of the Reserve Bank of New Zealand. Moreover, the recent Kiwi Unemployment Rate grew less than the RBNZ's forecast.
Looking ahead this week in New Zealand RBNZ Gov Orr is due to testify on the November 2023 Financial Stability Report before the Finance and Expenditure Committee, in Wellington. As head of the central bank, which controls short term interest rates, he has more influence over the nation's currency value than any other person. Traders scrutinize his public engagements as they are often used to drop subtle clues regarding future monetary policy. On Tuesday the RBNZ will release the quarterly Inflation Expectations survey which about 100 consumers which asks respondents where they expect prices to be 24 months in the future. On Thursday Statistics New Zealand will release the monthly Visitor Arrivals data. Finally, on Friday BusinessNZ will release the Performance of Manufacturing Index.

Key Movers

In the US on Friday US Initial Jobless Claims declined to 218K in the week ending on February 2, from the previous week's 227K, surpassing the estimated figure of 220K. Continuing Jobless Claims dropped to 1.871M for the week ending January 26. Market forecasts anticipated a decrease of 1.878M from the previous reading of 1.894M. US Wholesale Inventories remained consistent at 0.4%, as expected. The Atlanta Fed's wage growth tracker has declined to 5.0% in January from 5.2% reported in December. This represents the lowest growth rate since December 2021, when it stood at 4.5%. The S&P 500 (SPX) index rose 0.57% to close the session at 5,026.61. The Dow Jones (DJIA) dropped 0.14% to end at 38,671.69, while the Nasdaq (IXIC) gained 1.25% to finish at 15,990.66. The Technology Sector was the best-performing major S&P 500 sector mid-day, rising more than 1.5%. The Energy Sector is down nearly 1.6%. Applied Materials Inc (AMAT) closed higher more than 6.8% as the top gainer in the S&P 500. Expedia Inc. (EXPE) shed nearly 18% at $131.11.

Expected Ranges

  • NZD/USD: 0.6000 - 0.6200 ▲
  • NZD/EUR: 0.5550 - 0.5650 ▲
  • GBP/NZD: 2.0300 - 2.0500 ▼
  • NZD/AUD: 1.0400 - 1.0600 ▲
  • NZD/CAD: 0.8100 - 0.8300 ▼

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.