New Zealand dollar opens slightly stronger Against the Greenback
Wednesday 16 March, 2022
Daily Currency UpdateThe New Zealand dollar opens slightly stronger this morning when valued against the greenback currently trading at 0.6766 with the NZD recovering the small loss seen during local trading hours. On the data front yesterday the GDT auction price index fell by 0.9%, the first fall since early January and after a massive upward run. Whole milk powder prices fell 2.1%, going against the grain of the lift in futures prices since the previous auction on the SGX-NZX, while skim milk powder prices rose 1.6%.
Looking ahead and today we will see the release of the New Zealand Current Account which is directly linked to currency demand. A rising surplus indicates that foreigners are buying more of the domestic currency to execute transactions in the country. New Zealand Current Account deficit is expected to widen further, to 5.6% of GDP. Finally, on Friday we will see the release of the countries quarterly Gross Domestic Product (GDP) which is forecasted to rise by 3.2%.
Key MoversThe key movement overnight has been another plunge in oil prices. Brent crude fell as low as US$97.50 and is currently down 6% at US$100. On the data front US annual PPI inflation cracked the 10% mark for the first time this cycle, but the core measure was 0.3 percentage points weaker than expected at 8.4% y/y. The Empire State Manufacturing Index fell into negative territory, to reach minus 11.8, its lowest level in almost two years, indicative of some weaker economic momentum before the Fed even begins to raise rates.
All eyes today will be on the Federal Open Market Committee (FOMC) meeting which markets have anticipated the FOMC will enact an increase of a quarter-percentage point, or 25 basis points. From a market perspective, the key assessment will be whether the hike is “dovish” indicative of a cautious path ahead or “hawkish” in which officials signal they are determined to keep raising rates to fight inflation even if there are some adverse effects on growth.
- NZD/USD: 0.6650 - 0.6850 ▲
- NZD/EUR: 0.6050 - 0.6250 ▲
- GBP/NZD: 1.9150 - 1.9350 ▲
- NZD/AUD: 1.0550 - 1.0750 ▼
- NZD/CAD: 0.8550 - 0.8750 ▼