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NZD underperforms to start the week

Tuesday 29 March, 2022

Daily Currency Update

The New Zealand dollar underperformed through trade on Monday as volatility across financial markets prompted broad based US dollar strength. In the absence of any real headline newsflow markets looked to revise Fed funds rate projections, adjusting expectations, and pricing a series of 50 basis point rate hikes. The faster pace of Fed tightening, a move lower in global rates and a fall in commodities led by oil, forced the NZD off domestic session highs nearing 0.6970. Having slipped below 0.69 US cents the NZD found support on moves approaching 0.6890 and opens this morning buying 0.6893. With little of note on the domestic macroeconomic ticket out attentions remain with broader bond market performance, commodity prices and peace talks between the Russia and Ukraine for direction through trade on Tuesday.

Key Movers

Volatility permeated currency markets through trade on Monday as investors drove USD gains and the Yen tumbled. Markets looked to reprice fed funds rate projections while the BoJ offered to buy back 10-year JGB’s at 0.245% affirming policy makers commitment to keeping rates low and driving the Yen downward. The Yen gave up 2.5% as the USD surged through 125 before markets stepped in. Having touched intraday lows below 1.0950 the Euro recovered overnight to remain steady on the day, trading back near 1.10 while the GBP failed to arrest and reverse its recent downturn, giving up 1.31 to mark lows at 1.3070. With little of note on today’s ticket we look to broader bond market performance, commodity prices and peace talks between the Russia and Ukraine for direction.

Expected Ranges

  • NZD/USD: 0.6820 - 0.7000 ▼
  • NZD/EUR: 0.6230 - 0.6350 ▼
  • GBP/NZD: 1.8850 - 1.9050 ▼
  • NZD/AUD: 0.9170 - 0.9280 ▼
  • NZD/CAD: 0.8590 - 0.8700 ▼