Home Daily Commentaries New Zealand dollar trades below 62 US cents

New Zealand dollar trades below 62 US cents

Daily Currency Update

The Kiwi dollar is weaker this morning when valued against the Greenback. On Friday we saw the Kiwi dollar fall below the 0.6200 figure, extending its losses past the 200-day Exponential Moving Average (EMA) of 0.6226, with the pair extending its losses to six straight days on overall US Dollar strength. At the time of writing, the NZD/USD is exchanging hands at 0.6142 after dropping from a daily high of 0.6240. The NZD underperformed on the European crosses and was marginally softer against the AUD which closed near 0.9160. The lack of economic data in the United States (US) keeps NZD/USD traders bracing for the next week’s Federal Open Market Committee (FOMC) monetary policy decision, with the Federal Reserve (Fed) expected to deliver a 25 bps increase to the Federal Funds Rate (FFR) toward 5.25%-5.50%.
On the data front Statistics New Zealand announced that it intends to release more components of the CPI basket on a monthly basis in response to requests for more timely data on inflation. New Zealand is the only OECD country not to produce monthly CPI figures. Looking ahead this week and today we will see the release of the latest Trade Balance Figures which measures the difference in value between imported and exported goods during the reported month. We will also see the release of the Credit Card Spending figures by the Reserve Bank of New Zealand.

Key Movers

In the US on Friday Wall Street closed out another winning week with a quiet Friday, as stocks found some stability after sliding the day before. The S&P 500 edged up less than 0.1 per cent to cap its eighth winning week in the last 10. The Dow Jones added less than 0.1 per cent, its 10th gain in a row. The Nasdaq composite slipped by 0.2 per cent a day after tumbling to its worst loss in more than four months. The stock market has generally been on a tear this year as the economy has defied predictions of a recession. It’s so far powered through much higher interest rates meant to bring down inflation, and the hope is that it may outlast the Federal Reserve’s rate-hike campaign. The Fed is widely expected to raise its federal funds rate on Wednesday to its highest level since 2001.
Last week Japan’s core consumer price index climbed 3.3% year-on-year in June, in line with expectations of economists polled by Reuters and slightly higher than the 3.2% recorded in May. Analysts are split over the Bank of Japan’s moves after the country’s core inflation came in above the central bank’s target of 2% for the 15th straight month. The inflation numbers are key to the BOJ’s monetary policy considerations, ahead of its meeting on Friday. The central bank is expected to leave its policy settings unchanged with officials pushing aback against any near-term adjustment to its yield curve control program.

Expected Ranges

  • NZD/USD: 0.6050 - 0.6250 ▼
  • NZD/EUR: 0.5450 - 0.5650 ▼
  • GBP/NZD: 2.0650 - 2.0850 ▲
  • NZD/AUD: 1.0750 - 1.0950 ▼
  • NZD/CAD: 0.8050 - 0.8250 ▲