Daily Currency Update
NZD - New Zealand DollarThe New Zealand dollar tracked sideways through much of Tuesday bouncing between 0.7025 and 0.7050 as markets looked for a shift in the current narrative to inspire direction. US Fiscal Stimulus and Brexit negotiations again dominated headlines, and while both trudged toward an accord a compromise a deal still eludes key negotiators. The New Zealand dollar appears well bid now above 0.70 with ample market bulls and risk driven buyers on hand to prop up any short-term downtrends. The shift in domestic business conditions, strong housing market and changed monetary policy narrative have enabled the NZD to outperform through the last 6 weeks, but with much of that value now priced in further gains and an extension beyond 0.71 will be hard won without a shift in the current mood. An aggressive US fiscal stimulus package and sweeping Brexit trade agreement could be the catalyst needed to spur on another topside rally. With little of note on the domestic docket today, our attentions remain affixed to these key negotiations for any sign an agreement will be reached.
Key Movers
Currency markets offered little to inspire analysts through trade on Tuesday, with the majority of major currencies trending sideways through much of the day, chasing a catalyst to drive direction. The Great British Pound was the only Major unit to offer any meaningful movement, diving back below 1.33 to mark intraday lows at 1.3290 before a run of whippy trading saw it bounce between 1.3290 and 1.3380. Having drifted downward amid fears a Brexit deal will not be reached in time markets were emboldened, following reports an agreement on the management of the Irish/Northern Ireland border had been agreed. While the agreement is separate to trade negotiations it at least suggests a broader compromise can be reached. Our attentions today turn to the ECB policy meeting. While last week's rapid appreciation appears to have stalled, the Euro continues to trade above 1.21, having punched through resistance at 1.20 with relative ease. While we expect few surprises from the ECB we are keenly attuned to any commentary that suggest they may intervene to ensure further currency appreciations do not derail a 2021 recovery.
Expected Ranges
- NZD/USD: 0.6980 - 0.7110 ▼
- NZD/EUR: 0.5730 - 0.5860 ▲
- GBP/NZD: 1.8730 - 1.9120 ▼
- NZD/AUD: 0.9440 - 0.9570 ▲
- NZD/CAD: 0.8920 - 0.9120 ▲