Home Daily Commentaries NZD closed lower as attentions turn again to US/China trade war

NZD closed lower as attentions turn again to US/China trade war

Matt Richardson
Written by
Matt Richardson

Matt Richardson

OFXpert

Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange.

| Monday 10 February, 2025

Daily Currency Update

The NZD edged lower to close last week following a stronger than anticipated US labour market print. US non-farm payrolls painted a picture of resilience and tempered calls for the Fed to reconvene its easing cycle. Payroll growth through January proved stable while upward revisions to November and December data sets coupled with an uptick in earnings and a fall in the unemployment rate ensures the Fed can take its time in assessing the impact of Tariffs on inflation. Having edged toward US$0.57 the NZD slid back toward offshore session lows and US$0.5650 leading into the weekly close.

Today China’s retaliatory measures against the US are set to take effect and we can expect President Trump will not allow the event to pass without comment. We expect further update on US trade policy with the possibility the new administration hints to widening the scope of its tariff program to include the EU. The NZD remains vulnerable to US trade policy and we expect ongoing volatility until an agreement with China is reached.

Key Movers

The US dollar advanced Friday, following a stronger than anticipated US labour market update. Payrolls rose 143,000 in January. While this was below analyst estimates an upward revision to December and November data sets coupled with a fall in the unemployment rate and an uptick in earnings and markets were forced to pare back expectations for Fed rate cuts. All in the latest non-farm payroll report painted a picture of labour market resilience and affords the Fed scope to adopt a measured and patient approach to moderating interest rates. US yields rallied with 10-year rates up 8 basis points dragging the US dollar higher against most major trading partners. The Euro slipped back below 1.0350 while the GBP fell below 1.25 and eyed a break below 1.24 before finding support. The Yen was little changed on the day while the Canadian dollar outperformed after a stronger domestic labour market print reduced calls for the BoC to cut rates again.

There is little of note on the macroeconomic docket to start the week thus our attentions are affixed to Tariff headlines and Wednesday’s US CPI inflation report, ahead of PPI data Thursday and retail sales Friday.

Expected Ranges

  • NZD/USD: 0.5520 - 0.5720 ▲
  • NZD/EUR: 0.5400 - 0.5550 ▲
  • GBP/NZD: 2.1700 - 2.2200 ▼
  • NZD/AUD: 0.9000 - 0.9100 ▼
  • NZD/CAD: 0.8050 - 0.8250 ▼

Written by

Matt Richardson

OFXpert

As a Senior Corporate Client Manager, Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange. Matt has clients who he has been working with for over a decade, a testament to his knowledge and dedication in the field. Matt is also a regular contributor on Ausbiz, offering clear and precise updates on currency market trends, showcasing his ability to interpret complex financial data into actionable insights.

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