Kiwi steadies despite risk off mood
Wednesday 15 May, 2019
Daily Currency UpdateNZD - New Zealand DollarThe NZD edged marginally upward through trade on Tuesday, following equities and bond yields higher as optimism a US-China trade deal may be reached. Comments from president trump and key officials suggested the recent round of tariffs was nothing more than a temporary “Squabble” and that a deal will still be struck. Creeping back toward 0.66 the Kiwi touched intraday highs at 0.6588 before settling back into a tight range bound handle between 0.6580 and 0.6570. Having reached a 7 month low against the USD in the wake of last week’s RBNZ rate cut the NZD appears to steadied. While upside gains remain hard fought support at 0.6570 appears to be holding firm and a move back to fair value at 0.67 may materialise if trade optimism returns and the RBNZ waylays a second rate cut into 2020. With little of note on the domestic docket today attentions remain with trade and headline updates as the key driver of direction.
Key MoversThe Euro slid against the dollar on Tuesday as fresh concerns surrounding Italian economic stability weighed on the combined unit. Reports Italy is prepared to break European budget rules on debt in a bid to stimulate the domestic economy and drive employment growth forced investors to short the Euro and force the common currency toward a break back below 1.12. The GBP touched a two-week low on Tuesday as wage price data fell short of market expectations as employment growth missed the mark considerably amplifying concerns recent strength may have been a transitory benefit of industry front running Brexit uncertainty. Falling through 1.30 sterling touched 1.2906 and we expect ranges to be maintained until a clear Brexit path is laid.
- NZD/USD: 0.6550 - 0.6650 ▲
- NZD/EUR: 0.5820 - 0.5920 ▼
- GBP/NZD: 1.9520 - 1.9820 ▼
- NZD/AUD: 0.9350 - 0.9550 ▲
- NZD/CAD: 0.8820 - 0.8920 ▼