New Zealand dollar falls below US$0.61
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Daily Currency Update
The New Zealand dollar is stronger this morning when valued against the Greenback currently trading at 0.6072 at the time of writing. The Kiwi dollar fell below 0.6100 in Friday’s early American session as market expectations for the Federal Reserve (Fed) reducing interest rates in the June policy meeting have diminished. This has led to a big dent in the demand for risk-sensitive assets. The Fed is expected to keep interest rates unchanged in the range of 5.25%-5.50% while investors will majorly focus on the dot plot and economic projections.On the data front on Friday activity in New Zealand’s manufacturing sector continued to show improvement in February, but still remained in contraction, according to the latest BNZ BusinessNZ Performance of Manufacturing Index (PMI). The seasonally adjusted PMI for February was 49.3 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was up from 47.5 in January and the highest level of activity since February 2023. However, the sector has now been in contraction for 12 consecutive months. Looking ahead this week and on Wednesday we will see the release of the Westpac Consumer Sentiment and Current Account. On Thursday we will see the release of the quarterly Gross Domestic Product (GDP). It's the broadest measure of economic activity and the primary gauge of the economy's health.
Key Movers
Last week the number of Americans filing new claims for unemployment benefits fell last week, pointing to moderate job growth despite slowing economic activity. Initial claims for state unemployment benefits declined 11,000 to a seasonally adjusted 346,000, the Labor Department said on Thursday. Claims for the prior week were revised to show 3,000 more applications received than previously reported. Economists polled by Reuters had expected first-time applications to fall to 345,000 last week. Although claims have been volatile in recent weeks, there is little in the numbers to suggest a shift in the moderate pace of job gains, even as the broader economy is struggling under the weight of higher taxes and deep government spending cuts.The Dow Jones Industrial Average (DJIA) is down around half a percent as markets round the corner into the Friday closing bell with US equities broadly lower on the day. An extended pullback in the tech and telecoms sectors are dragging down the averages. From the technical point of view, Dow Jones is moving towards the nearest support at 38,500 – 38,550. A successful test of this level will open the way to the test of the next support at 38,100 – 38,150. The SP500 is losing ground as traders react to the economic reports. NY Empire State Manufacturing Index declined from -2.4 in February to -20.9 in March, compared to analyst consensus of -7. Industrial Production increased by 0.1% in February. The final reading of the Michigan Consumer Sentiment report indicated that Consumer Sentiment pulled back from 76.9 in February to 76.5 in March. Treasury yields continued to move higher as bond traders focused on the recent CPI and PPI reports, which showed that inflation was not under control.
Expected Ranges
- NZD/USD: 0.6450 - 0.6650 ▼
- NZD/EUR: 0.5450 - 0.5650 ▼
- GBP/NZD: 2.0750 - 2.0950 ▼
- NZD/AUD: 1.0650 - 1.0750 ▼
- NZD/CAD: 0.8100 - 0.8300 ▲