New Zealand dollar falls below US$0.59
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Daily Currency Update
The New Zealand dollar is weaker this morning when valued against the Greenback currently trading at 0.5822 at time of writing. The NZD/USD pair plummeted below the key support of 0.5850 in European trading hours on Friday. The Kiwi pair plunges as the New Zealand dollar (NZD) weakened across the board amid firm expectations that the Reserve Bank of New Zealand (RBNZ) will follow an aggressive policy-easing approach. The RBNZ reduced its Official Cash Rate (OCR) by 50 basis points (bps) to 4.25% in its monetary policy meeting on November 27 and guided for similar rate cut pace if economic conditions continue to evolve as projected. Traders are also confident the RBNZ will cut its OCR again by 50 bps to 3.75% in the February policy meeting. Last week on the data front The ANZ World Commodity Price Index increased 2.9% m/m in November, driven up primarily by stronger dairy prices. In New Zealand dollar terms, the gain was more significant, with the 5.2% m/m lift in the index supported by a 1.0% fall in the NZD Trade Weighted Index. Looking ahead this week and on Wednesday Statistics New Zealand will release the quarterly Economic Survey of Manufacturing. On Friday BusinessNZ will release the Performance of Manufacturing Index a survey of manufacturers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.Key Movers
The US dollar Index (DXY), which measures the value of the USD against a basket of currencies, gained toward 106.00 on Friday, driven by several key movers. The US dollar remained flat after the release of Nonfarm Payrolls (NFP) data, while markets anticipated a potential December rate cut by the Federal Reserve (Fed). On the data front the US published the November Nonfarm Payroll (NFP) report. The headline figure showed 227K new jobs were added in the month, higher than the 200K anticipated by market analysts. Also, the Unemployment Rate ticked marginally higher, from 4.1% previously to the expected 4.2%. The NFP report also showed that the Labor Force Participation Rate edged lower to 62.5%, while the annual wage inflation, as measured by the change in the Average Hourly Earnings, held steady at 4%, coming in above the market forecast of 3.9%. The uptick in inflationary pressures fueled bets of an upcoming December rate cut, now at roughly 83% from 71% on Thursday. The Dow Jones Industrial Average (DJIA) turned lower on Friday, shedding another 140 points and dragging the equity index into the low end. While Amazon (AMZN) stock is up for the sixth consecutive session on Friday, a streak that began on November 29. What’s more, AMZN stock has advanced in eight out of the last nine sessions. Since then the world’s largest ecommerce platform has gained 14.1% or nearly $300 billion in market cap.Expected Ranges
- NZD/USD: 0.5700 - 0.5900 ▼
- NZD/EUR: 0.5400 - 0.5600 ▼
- GBP/NZD: 2.1550 - 2.1750 ▲
- NZD/AUD: 1.0700 - 1.0900 ▲
- NZD/CAD: 0.8100 - 0.8300 ▼