NZD unable to hold onto upswing in face of weaker China data
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Daily Currency Update
The New Zealand dollar fell through trade on Tuesday, unable to sustain its break above US$0.6050 amid a US dollar upswing. Having touched fresh 2025 highs through the start of the week the NZD slid back below US$0.60 to mark session lows at US$0.5990, trading sideways and within a narrow 20-point range for much of the overnight session. Weaker than expected China Caixin Manufacturing data dampened demand for the NZD as data suggested activity fell to its lowest level since September 2022, a clear signal the impacts of the Trade war with the US are being felt across the economy. With US/China tensions rising again after a period of de-escalation markets appear reluctant to extend gains beyond the current ranges.Our attention today turns to offshore as the domestic docket carries nothing of consequence. Australian Q1 GDP data, US payroll numbers, ISM services data and an Bank of Canada policy meeting round out the ticket.
Key Movers
The US dollar has recovered some of the week's earlier losses and has been one of the stronger performing majors through the last 24 hours. Price action across currencies was muted through trade on Tuesday with markets ignoring an OECD report that revised down global growth forecast, amid substantial barriers to trade and growing policy uncertainty. Instead, markets looked to US Jolts jobs data. The April report showed a rise in job opportunities well beyond market expectations suggesting the labour market has retained its resilience despite broader policy uncertainties. While subindices with the report suggest a growing instability the data still supported an upward move for US treasuries and the dollar. The euro fell back below 1.14 settling near 1.1370 after euro area CPI inflation data printed lower than expected, elevating calls for the ECB to lower rates for an 8th time when it meets Thursday. The GBP is weaker too while the USD pushed back above 144 against the yen.Our attentions now turn to US ADP private payroll data as a key marker ahead of Friday’s non-farm payroll numbers, while ISM services data and the Fed’s beige book offer further insights into the impacts of tariffs and Trump policy. Outside the US the Bank of Canada meets, we expect rates will be unchanged, yet some analysts are calling for a 25-point cut.
Expected Ranges
- NZD/USD: 0.5950 - 0.6050 ▼
- NZD/EUR: 0.5220 - 1.532 ▲
- GBP/NZD: 2.2300 - 2.2600 ▲
- NZD/AUD: 0.9250 - 0.9320 ▼
- NZD/CAD: 0.8180 - 0.8320 ▼