Kiwi dollar remains relatively flat
Monday 1 February, 2021
Daily Currency UpdateThe New Zealand dollar was well supported on Friday, revisiting a high of 0.7225 before weakening into the close to finish the week below 0.7200 level around 0.7150. The Reserve Bank of New Zealand last week announced a tapering of their bond purchases buying only $570m of government bonds this week as part of its large scale asset purchase programme, down from $650m the previous week. An indication the RBNZ isn’t particularly concerned with the market-led rise in rates. Looking ahead this week and further New Zealand Dollar weakness may also be on the way with the release of the fourth quarter New Zealand labour market data on Wednesday. Market forecasts could see the headline unemployment rate jump from 5.3% to 5.6% on the quarter, a deterioration which may damage confidence in the domestic outlook. On Thursday this week we will see the release of Monthly Building Consents and Preliminary ANZ Business Confidence. From a technical perspective, the NZD/USD pair is currently trading at 0.7162. We continue to expect support to hold on moves approaching 0.7150 while now any upward push will likely meet resistance around 0.7220.
Key MoversThe US dollar has fallen over 13% from its high since last March las year thanks largely to historic moves by the Federal Reserve to inject liquidity into the financial system. The Federal Reserve announced its latest monetary policy decision, and as widely estimated, they left rates and bond-buying programs unchanged. On the release front on Friday we saw the release of US Durable Goods Orders which rose by a modest 0.2% for the month of January. Quarterly Gross Domestic Product was up 4.0%, above market forecasts, while weekly unemployment claims continued to shrink down 85K from the previous week ending January 22. Looking ahead this week in the US and all eyes will be on Thursdays Unemployment Claims which is expected to have added 875K new jobs in the month. On Friday we will see the release of Unemployment Rate which is expected to remain at 6.7%.
- NZD/USD: 0.7050 - 0.7250 ▲
- NZD/EUR: 0.5800 - 0.6000 ▲
- GBP/NZD: 1.8900 - 1.9200 ▼
- AUD/NZD: 1.0550 - 1.0750 ▼
- NZD/CAD: 0.9050 - 0.9250 ▼