New Zealand dollar trades above 63 US cents
Tuesday 21 March, 2023
Daily Currency UpdateThe Kiwi dollar is steady this morning when valued against the Greenback. Risk appetite opened the week on a positive note, following the government-brokered deal for UBS to buy Credit Suisse. The NZD’s move early yesterday above US$0.63 proved short-lived and has settled around US$0.6250, underperforming for the day and down on all the key crosses.
In a case where the NZD drops below US$0.6175, the odds of witnessing a slump toward the monthly low near US$0.6085, can’t be ruled out. On the flip side, a clear upside break of the stated resistance line, near US$0.6285 at the latest, will need validation from the US$0.6300 round figure to propel the quote towards the tops marked during early February near US$0.6390.
The Kiwi asset is expected to remain on the tenterhooks as investors are awaiting the release of the interest rate decision by the People’s Bank of China (PBoC) for further action. China kept its benchmark lending rates unchanged for the seventh straight month in March, as expected, with the economy already benefiting from policy actions taken last week as it recovers from the pandemic.
Looking ahead this week, Statistics New Zealand will release the monthly Trade Balance figures while the Reserve Bank of New Zealand will release local credit card spending today, which is correlated with consumer spending and confidence. Rising debt levels are a sign that lenders feel comfortable issuing loans, and that consumers are confident in their financial position and eager to spend money.
On Wednesday we will see the Global Dairy Trade (GDT), a leading indicator of the nation's trade balance with other countries because rising commodity prices boost export income and the Westpac Consumer Sentiment.
Key MoversA solid rebound in the US equity futures turns out to be a key factor, lending some support to the risk-sensitive Aussie amid the emergence of fresh selling around the US dollar. After another wild trading session, the S&P500 is currently up 0.8%. The Euro Stoxx 600 index rose 1%, with all sectors higher. UBS shares were down as much as 16% in early trading and finished the day up 1.3%.
The Australian share market, however, closed firmly in the red on Monday, marking the start of another rocky week in equity markets as investors around the world digested news that UBS will take over smaller rival Credit Suisse in an emergency deal designed to avert a widespread financial crisis.
The S&P/ASX 200 finished down 1.4%, or 96.3 points, to 6898.5 points at the end of the session, setting a new 50-day low. The drop extends on the local bourse’s declines from last week, in which it suffered its worst weekly loss since September and marked its longest losing streak since the 2008 financial crisis.
Some of the world's largest central banks have come together to stop a banking crisis from spreading, in the wake of Swiss authorities persuading multinational investment bank UBS to buy beleaguered rival Credit Suisse in a historic deal. UBS will take over Credit Suisse for three billion Swiss francs (AU$4.82 billion) in a bid to rescue the embattled lender a move backed by Swiss authorities.
Soon after the announcement, the US Federal Reserve, European Central Bank (ECB) and other major central banks issued statements to reassure markets walloped by the banking crisis, which started with the collapse of two regional US banks earlier this month.
- NZD/USD: 0.6150 - 0.6350 ▲
- NZD/EUR: 0.5750 - 0.5950 ▲
- GBP/NZD: 1.9550 - 1.9750 ▲
- NZD/AUD: 1.0650 - 1.0850 ▼
- NZD/CAD: 0.8450 - 0.8650 ▲