NZD steady as price action across FX markets is muted
Tuesday 18 January, 2022
Daily Currency UpdateThe New Zealand dollar maintained a narrow handle through trade on Monday, bouncing between 0.6785 and 0.6820 US cents. Markets largely ignored Chinese GDP data and a PBOC policy update, instead focusing on the emergence of Omicron in China’s most populous cities, Shanghai and Beijing. Concerns the variant could take hold pushed investors to the sidelines on Monday as a wider outbreak in the midst of China’s Covid zero policy could derail growth expectation and heap further pressure on an already stretched global supply chain. With little of note on today’s ticket our attentions remain affixed to next weeks all important CPI inflation print. With market pricing for monetary policy change relatively steady at this point analyst are looking for affirmation a consolidate program of rate hikes is still in play. A robust CPI print might force policy makers to bring forward or accelerate the price of rate hikes, perhaps lending support to the NZD. Until then we expect the Kiwi will continue to bounce between 0.67 and 0.69 US cents.
Key MoversPrice action across major currencies was muted Monday, in what was a very sluggish start to the week. US markets were closed in observance of Martin Luther King Jnr day and with little headline macroeconomic data on hand investors appeared content to sit on the sidelines and maintain a narrow trading range. Having bounced back above 95 on Friday the DXY tracked between 95.04 and 95.35 as the Euro struggled to extend beyond 1.1430, the Pound slipped back below 1.3650 and the Yen gave up 114.50. Our attentions today turn to A Bank of Japan policy outlook and rate announcement. We expect few changes from the current policy setting.
- NZD/USD: 0.6750 - 0.6830 ▼
- NZD/EUR: 0.5920 - 0.5990 ▼
- GBP/NZD: 1.9950 - 2.0150 ▼
- NZD/AUD: 0.9390 - 0.9450 ▼
- NZD/CAD: 0.8480 - 0.8560 ▼