Home Daily Commentaries New Zealand dollar tumbles through US$0.59, marking ninth consecutive daily loss

New Zealand dollar tumbles through US$0.59, marking ninth consecutive daily loss

Matt Richardson
Written by
Matt Richardson

Matt Richardson

OFXpert

Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange.

| Friday 26 July, 2024

Daily Currency Update

Another brutal day for the New Zealand dollar as markets extended loses below US$0.59, amid stronger US GDP data and a souring China growth outlook. Market expectations for China’s growth outlook cooled further through trade on Thursday, extending losses across local and regional equity markets and commodity prices. Bloomberg’s industrial metals index has fallen 9% over the last nine days and is down near 20% since hitting a 2024 peak in May. With US GDP data surprising to the upside and the Fed now unlikely to adjust its policy setting until September, support for the NZD has all but evaporated. Having tested a break above US$0.62 in early June, the NZD has tumbled through US$0.61, US$0.60 and US$0.59, touching intraday lows at US$0.5884 overnight. While its antipodean counterpart found support late, the NZD tracked sideways into the daily close, unable to foster a break off the daily low.

Our attentions turn now to US inflation data and the Fed’s preferred measure, the PCE Price index, for direction into the weekend.

Key Movers

There is plenty to digest this morning as markets absorb a stronger than expected US GDP data print. Real GDP growth accelerated 2.8% in the 2nd quarter, well up on Q1 and streaks ahead of consensus estimates. Details showed consumer spending remains a key driver, while business investment remains strong. The robust print shows a US economy that is coping remarkably well with tighter monetary policy conditions and suggests there is little urgency for the Fed to start its easing cycle until inflation is back to target. Markets have all but priced out any chance of a rate cut next week and are instead focused on tonight’s PCE deflator index as a key marker for inflation.

The Swiss Franc was the days outperformer, buoyed by the broader risk off narrative, while the yen tracked sideways and the euro proved resilient.

Our attentions turn now to Japan’s Tokyo CPI inflation report and US inflation data as key markers for direction into the weekly close.

Expected Ranges

  • NZD/USD: 0.5850 - 0.5950 ▼
  • NZD/EUR: 0.5380 - 0.5450 ▼
  • GBP/NZD: 2.1700 - 2.2000 ▲
  • NZD/AUD: 0.8970 - 0.9100 ▼
  • NZD/CAD: 0.8080 - 0.8200 ▼

Written by

Matt Richardson

OFXpert

As a Senior Corporate Client Manager, Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange. Matt has clients who he has been working with for over a decade, a testament to his knowledge and dedication in the field. Matt is also a regular contributor on Ausbiz, offering clear and precise updates on currency market trends, showcasing his ability to interpret complex financial data into actionable insights.

View previous day