New Zealand dollar trading above US$0.59
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Daily Currency Update
The New Zealand dollar is stronger this morning when valued against the Greenback currently trading at 0.5901 at time of writing. The NZD/USD pair holds gains above the round-level support of 0.5900 in Friday’s European session. Meanwhile, the New Zealand dollar performs strongly even though market participants expect the Reserve Bank of New Zealand (RBNZ) to cut interest rates again by 50 bps in its next monetary policy meeting in February 2025 after reducing by the same margin on Wednesday. RBNZ Governor Adrian Orr kept doors for an outsize interest rate cut open but the decision will depend on economic conditions. Orr was confident about a further decline in inflationary pressures. On Friday New Zealand’s ANZ Business Confidence dipped marginally in November, falling from 65.7 to 64.9, but it remains at what ANZ describes as an “impressive high” level. Own Activity Outlook, a key forward indicator, rose to a decade high of 48.0 from 45.9, reinforcing optimism about future economic conditions. Inflation related metrics also showed broad improvement, with cost expectations down from 64.2 to 62.9, wage expectations easing from 77.0 to 75.5, and pricing intentions falling from 44.2 to 42.2, marking the first decline in four months. Notably, inflation expectations dropped significantly from 2.83% to 2.53%. Looking ahead and today we will see the release of the latest monthly Building Consents.Key Movers
The US dollar Index (DXY), which measures the value of the USD against a basket of currencies, trades near 106.10 with mild losses but trimmed most of its daily losses, which saw the index below 106.00. Overall, the US dollar maintains a bullish outlook, supported by strong economic data and a hawkish Federal Reserve (Fed) stance. Despite profit-taking and geopolitical uncertainty, the uptrend remains intact. Going forward, investors will focus on a slew of US employment-linked data and the ISM Manufacturing and Services PMI data for November, which will be released next week. The array of economic data will influence market expectations for the Federal Reserve’s (Fed) monetary policy action in December. According to the CME FedWatch tool, the likelihood for the Fed to cut interest rates by 25 basis points (bps) to 4.25%-4.50% in the December meeting is 66% while the rest supports leaving them unchanged. US stocks closed at record highs on Friday, with the Dow Jones Industrial Average rising 0.4% to close at a record high and the S&P 500 gaining 0.6% to reach a record at the end of a holiday-shortened trading session. Friday's rally, which included a 0.9% jump from the tech-heavy Nasdaq Composite, capped off a winning month for all three major indexes. It also marked the best post-Thanksgiving Friday session for the S&P 500 since 2012. Gold's price advanced late during the North American session on Friday, up by 0.67%, yet it remains set to print monthly losses of over 3%.Expected Ranges
- NZD/USD: 0.5800 - 0.6000 ▲
- NZD/EUR: 0.5450 - 0.5650 ▲
- GBP/NZD: 2.1300 - 2.1500 ▼
- NZD/AUD: 1.0850 - 1.1050 ▼
- NZD/CAD: 0.8150 - 0.8350 ▼