NZD outpaces counterparts as attentions shift US/China trade talks
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Daily Currency Update
The NZD outperformed Monday, outpacing most trading partners as the US dollar continues to underperform. Newsflow was light to start the week with little headline data on hand to drive direction. US treasury yields edged lower forcing the USD to start the new week on the back foot, allowing the NZD to extend its break above US$0.60 and again test levels above US$0.6050. US/China trade talks began in London and will resume today with early reports suggesting an easing of tensions as both sides address concerns surrounding export controls. The US has agreed to ease restrictions on the export of semi-conductors while China will release more rare earths in a show of good will as negotiations continue. Easing hostilities have helped drive risk demand with the NZD marking intraday and overnight highs just short of US$0.6065. The NZD is also stronger against key crosses, pushing above 0.53 against the Euro while pushing above 0.4450 against the Pound.Our attentions turn now to Australian consumer sentiment, while UK labour data US small business data round out the macro ticket. US/China trade talks will continue to drive sentiment.
Key Movers
The US dollar has underperformed again when values back against other majors with the DXY index down 0.2%. Having found momentum into last weeks close after US non-farm payrolls printed marginally above expectations the USD resumed its softer trajectory Monday unable to push against a decline in US treasury yields as markets move to price in Fed rate cuts. Payrolls data allowed markets to pare back expectations for a larger rate adjustment but analyst are still pricing two full 25 point adjustments before year end. With US/China trade talks reportedly proving “Fruitful” sentiment improved through Monday. The Euro held above 1.14, tracking between 1.1390 and 1.1440, as Sterling held above 1.35 and the Yen forced a break back below 144.50 and toward 144.Our attentions today turn to UK labour data while US/China trade talks drive sentiment and underlying direction.
Expected Ranges
- NZD/USD: 0.5980 - 0.6100 ▲
- NZD/EUR: 0.5250 - 0.5350 ▲
- GBP/NZD: 2.2300 - 2.2500 ▼
- NZD/AUD: 0.9250 - 0.9320 ▲
- NZD/CAD: 0.8220 - 0.8320 ▲