Home Daily Commentaries NZD unable to capitalise on fall in USD amid risk-off mood

NZD unable to capitalise on fall in USD amid risk-off mood

Matt Richardson
Written by
Matt Richardson

Matt Richardson

OFXpert

Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange.

| Wednesday 6 March, 2024

Daily Currency Update

The New Zealand dollar underperformed through trade on Tuesday, unable to take advantage of a dip in the USD amid a risk-off mood. Equities edged lower and commodity prices remain under pressure, weighing on the NZD and forcing a move toward US$0.6070. Markets were little moved by an announcement from Premier Li that China will target economic growth of 5% this year, sceptical that officials will issue the scale of stimulus needed to rebuild an economy mired in a property crisis, disinflation and burgeoning local government debt. Having touched intraday lows at US$0.6072 the NZD clawed its way back above US$0.61 touching US$0.6103 after a softer-than-expected US ISM services print. With the USD on the back foot, the NZD was however unable to maintain the recovery through the overnight session and opened this morning in much the same net position as yesterday at US$0.6090.
Our attention now turns to Domestic construction data, ahead of an Australian GDP Update, key US jobs data and commentary from Fed Chair Jerome Powell.

Key Movers

The US dollar edged lower through trade on Tuesday following a softer-than-expected ISM services report. The headline reading slipped to 52.6, down from 54 and below expectations, with key employment sub-indexes sliding into contractionary territory, suggesting a softening in the labour market ahead of Friday’s all-important non-farm payroll print. The dollar fell against the euro and the GBP while the yen was the day's best performer, benefiting from lower US treasury yields and the risk-off tone. Reports Prime Minister Kishida will be attending meetings with Unions and employers in a bid to stimulate wage increases have bolstered hopes the Bank of Japan may be able to call time on its negative rates policy. The USD slipped below ¥150 and opened this morning at ¥149.97.
Our attention now turns to commentary from Fed Chair Jerome Powell and ADP employment numbers ahead of tomorrow’s European Central Ban policy update and Friday’s non-farm payroll print.

Expected Ranges

  • NZD/USD: 0.6050 - 0.6150 ▼
  • NZD/EUR: 0.5550 - 0.5650 ▼
  • GBP/NZD: 2.0780 - 2.0980 ▲
  • NZD/AUD: 0.9300 - 0.9400 ▼
  • NZD/CAD: 0.8200 - 0.8300 ▲

Written by

Matt Richardson

OFXpert

As a Senior Corporate Client Manager, Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange. Matt has clients who he has been working with for over a decade, a testament to his knowledge and dedication in the field. Matt is also a regular contributor on Ausbiz, offering clear and precise updates on currency market trends, showcasing his ability to interpret complex financial data into actionable insights.