Kiwi edged higher ahead of RBNZ policy meeting
Wednesday 12 February, 2020
Daily Currency UpdateNZD - New Zealand DollarThe New Zealand dollar crept upward through trade on Tuesday, advancing on the back of a rebound in risk appetite. Market concerns surrounding the economic impact of the Coronavirus abated Tuesday as reports suggest the pace of contamination has slowed through the past 6 days. Having pushed back through 0.64 the NZD touched intraday highs at 0.6422 before correcting lower into today’s open as attentions shift to the RBNZ monetary policy statement. We expect the RBNZ will maintain its current policy setting with only a small portion of analyst pricing in a rate cut. If not for the coronavirus we would expect the RBNZ and Governor Orr to proffer a bullish and hawkish statement as domestic macroeconomic indicators have begun trending upward through the past few months. However, while the coronavirus continues to dominate headlines, we anticipate a neutral tone will be adopted and cap upside gains through the short term.
Key MoversThe US dollar edged lower through trade on Tuesday, edging off four-month highs as risk appetite improved and demand for haven assets abated. With volatility across FX markets largely non-existence the Greenback remains largely well bid and we expect the broader bullish narrative to continue, especially as investors look to short the Euro in a carry play to foster a higher yield return. The Euro fell through 1.09 touching 1.0870 before the shift in risk sentiment helped foster a small bounce into this morning’s open. With safe haven assets underperforming overnight we expect broad based direction to continue fluctuating on headline new updates and events in relation to the coronavirus as turn to Fed Chari Jerome Powell as the primary macroeconomic driver.
- NZD/USD: 0.6320 - 0.6480 ▲
- NZD/EUR: 0.5830 - 0.5920 ▲
- NZD/AUD: 0.9480 - 0.9590 ▼
- NZD/CAD: 0.8470 - 0.8530 ▲