New Zealand dollar slips below 0.69 U.S. cents
Tuesday 22 March, 2022
Daily Currency UpdateThe New Zealand dollar opens slightly weaker this morning when valued against the Greenback erasing all the gains we saw last week with the Kiwi dollar slipping below 0.69 U.S. cents. On the data front yesterday we saw the release of the Monthly Trade Balance figures. New Zealand recorded its biggest monthly trade deficit (value of exports minus value of imports) for a February in a series that dates back to 1960. The back of the deficit, the rolling annual traded deficit for the 12 months to February came in at a touch under $8.4 billion a new all-time high. A year ago the annual trade balance was standing at a surplus of $2.4 billion. The deficit for the month was just under $385 million, which headed off the biggest previous February deficit of $374 million recorded in 2006.
Looking ahead and today in New Zealand and we will see the release of Westpac Consumer Sentiment which is a leading indicator of consumer spending, which accounts for a majority of overall economic activity. The quarterly Westpac measure of consumer confidence today should be weak, if the monthly ANZ survey is anything to go by, which already shows consumer confidence lower than the depths of the GFC. From a technical perspective, the NZD/USD pair is currently trading at 0.6886. We continue to expect support to hold on moves approaching 0.6837 while now any upward push will likely meet resistance around 0.6914.
Key MoversOvernight Chair Jerome Powell’s hawkish speech roiled financial markets sending Treasury yields spiking higher as the Federal Reserve looks poised to raise interest rates sharply to slow down inflation. Jerome Powell said the Federal Reserve would raise its benchmark short-term interest rate faster than expected in order to restrain growth and hiring, if it decides this would be necessary to slow rampaging inflation. Last week we saw the Federal Open Market Committee (FOMC) raise their official interest rate a quarter-point from near zero to a range of 0.25% to 0.5%. The two-year Treasury rate surged almost 20 points to its highest level since 2019, while the three-year and 10-year yields jumped by the most since March 2020 after the Fed chair said the central bank will take the “necessary steps” to get price increases under control.
- NZD/USD: 0.6800 - 0.7000 ▼
- NZD/EUR: 0.6100 - 0.6300 ▼
- GBP/NZD: 1.9000 - 1.9200 ▲
- NZD/AUD: 1.0650 - 1.0850 ▼
- NZD/CAD: 0.8550 - 0.8750 ▲