New Zealand dollar trades below US$0.61
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Daily Currency Update
The New Zealand dollar is slightly weaker this morning when valued against the Greenback currently trading at US$0.6052 at the time of writing. The NZD/USD pair remains under some selling pressure during the early European session on Tuesday. On the data front, the Westpac Consumer Confidence Index rose 4.3 points in March, taking it to a level of 93.2. That’s still below the 100 level, signalling that the number of New Zealanders who are feeling pessimistic about economic conditions still outnumbers those who are feeling optimistic. However, some households’ concerns about financial pressures are starting to ease, and that has seen confidence picking up to its highest level in more than two years. But while inflation is still high, it’s fallen from rates of over 7% in 2022 to 4.7% at the end of last year. In addition, with that easing in inflation, it looks likely that interest rates have now peaked, with some fixed-term mortgage rates dropping back in recent months. Looking ahead for the rest of the week and tomorrow we will see the release of the quarterly Gross Domestic Product (GDP) which is expected to grow 0.1% QoQ.Key Movers
The US economic data in recent weeks indicated that the US economy is strong and inflation remains elevated. Markets expect the Fed to leave interest rates unchanged for a fifth straight time at the end of its two-day meeting on Wednesday. The Fed kicked off its flurry of rate hikes in March 2022 as inflation soared during the pandemic, reaching a 40-year high in June of that year. Although inflation has rapidly cooled since then, it remains higher than the Fed would like, which is why economists believe the central bank will keep rates steady this week. The Federal Reserve's Open Market Committee meets on March 19-20. The rate-setting panel will announce its rate decision at 2 p.m. Eastern time on March 20. Chairman Jerome Powell will hold a press conference at 2:30 p.m. on Wednesday to discuss the Federal Open Market Committee's rate decision and provide information on the central bank's outlook.Yesterday Japan's central bank raised the cost of borrowing for the first time in 17 years. The Bank of Japan (BOJ) increased its key interest rate from -0.1% to a range of 0%-0.1%. It comes as wages have jumped after consumer prices rose. In a statement announcing the decision, the BOJ said it will keep buying "broadly the same amount" of government bonds as before and ramp up purchases in case yields rise rapidly. Expectations that the BOJ would finally raise rates had been growing since Governor Kazuo Ueda took office in April last year. The latest official figures showed that even though the rate of price rises has been slowing, Japan's core consumer inflation held at the bank's 2% target in January.
Expected Ranges
- NZD/USD: 0.5950 - 0.6150 ▼
- NZD/EUR: 0.5450 - 0.5650 ▼
- GBP/NZD: 2.0900 - 2.1100 ▲
- NZD/AUD: 1.0700 - 1.0900 ▼
- NZD/CAD: 0.8100 - 0.8300 ▼