Home Daily Commentaries New Zealand dollar trades above 61 US cents

New Zealand dollar trades above 61 US cents

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.

| Thursday 22 February, 2024

Daily Currency Update

The New Zealand dollar is stronger this morning when valued against the Greenback currently trading at 0.6175 at time of writing. Yesterday we saw the NZDUSD pair trade modestly higher, with the upside limited amid speculations of the Federal Reserve’s (Fed) unchanged rate outlook and softer New Zealand inflation data making the Kiwi struggle to gain ground. On the data front, New Zealand's Producer Price Index (PPI) beat expectations, printing higher than forecasts for both the Output and Input components but it still receded from the previous quarter's figures. According to Stats NZ, the Output PPI rose 0.7% for the quarter ended in December versus the forecast decline to 0.4%, edging down from the previous quarter's 0.8%. New Zealand's Input PPI for the same period printed at 0.9% compared to the expected 0.4, but still fell back from the previous print of 1.2%.

Looking ahead, today Statistics New Zealand will release the latest Trade Balance figures. Export demand and currency demand are directly linked because foreigners must buy the domestic currency to pay for the nation's exports. Export demand also impacts production and prices at domestic manufacturers. On Friday we will see the release of Retail Sales figures for the quarter. Retail sales figures are the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

 

Key Movers

In the US, Federal Reserve officials indicated at their last meeting that they were in no hurry to cut interest rates and expressed both optimism and caution on inflation, according to minutes from the session released on Wednesday. The meeting summary did indicate a general sense of optimism that the Fed’s policy moves had succeeded in lowering the rate of inflation, which in mid-2022, hit its highest level in more than 40 years. However, officials noted that they wanted to see more before starting to ease policy while saying that rate hikes are likely over. Before the meeting, a string of reports showed that inflation, while still elevated, was moving back toward the Fed’s 2% target. Meanwhile, Wednesday marked the third day in a row that US stocks declined, as traders look ahead to Nvidia’s latest quarterly earnings report. The Dow Jones Industrial Average traded 176 points lower, or 0.4%. The S&P 500 slipped 0.5% and the Nasdaq Composite slid nearly 1.1%. Nvidia is slated to post its fiscal fourth-quarter results after the bell. Concerns surrounding Nvidia’s high valuation have grown leading up to the announcement, as shares of the chipmaker have soared about 230% over the past year. The stock slid more than 3.5% on Wednesday.

Expected Ranges

  • NZD/USD: 0.6070 - 0.6270 ▲
  • NZD/EUR: 0.5600 - 0.5800 ▲
  • GBP/NZD: 2.0350 - 2.0550 ▼
  • NZD/AUD: 1.0500 - 1.0700 ▼
  • NZD/CAD: 0.8250 - 0.8450 ▲

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.