Home Daily Commentaries New Zealand dollar trades above US$0.60 

New Zealand dollar trades above US$0.60 

Daily Currency Update

The New Zealand dollar is slightly stronger this morning when valued against the Greenback currently trading at US$0.6003 at the time of writing. The Kiwi dollar traded on a flat note around the US$0.6000 mark during the early Asian session on Tuesday. The USD Index (DXY) retreats from the recent peaks and remains above the 104.00 mark. The NZD/USD edges lower following the release of US Durable Goods Orders for February, which roundly beat expectations, according to data from the US Census Bureau. Looking ahead to the rest of this week the only scheduled release will be the ANZ Business Confidence on Thursday. A survey of about 1,500-2,000 businesses asks respondents to rate the relative 12-month economic outlook. A leading indicator of economic health - businesses react quickly to market conditions, and changes in their sentiment can be an early signal of future economic activity such as spending, hiring, and investment.

Key Movers

On the data front on Monday, the US February New Home Sales dropped 0.3% MoM from a 1.7% gain in January, below the market expectations for a 2.3% MoM rise. Meanwhile, the Dallas Fed Manufacturing Survey fell to -14.4 in March from the previous reading of -11.3. Overnight we saw the release of US Durable Goods Orders for February, which roundly beat expectations, according to data from the US Census Bureau. The data showed headline Durable Goods Orders rising 1.4% when 1.3% had been forecast, and Durable Goods Orders ex Defense rising 2.2% when 1.1% had been estimated. Durable Goods ex Transport also beat forecasts, coming in at 0.5% versus 0.4% expected. Finally, Nondefense Capital Goods ex-Aricraft rose 0.7% versus 0.1% expected. The US PCE report on Friday will be in the spotlight. The headline PCE is estimated to show an increase of 0.4% MoM, while the Core CPE is projected to rise by 0.3% MoM.
The pound faces pressure near US$1.2650 against the US Dollar in Tuesday’s early American session as the latter rebounds. The GBP/USD pair exhibits falls as investors expect that the Bank of England will be more dovish this year than previously anticipated, driven by lower-than-anticipated inflation data in January and February. A senior Bank of England policymaker has warned that financial markets are expecting too many interest rate cuts this year and that the UK central bank is unlikely to move before the US Federal Reserve. Catherine Mann, an external member of the Bank’s rate-setting monetary policy committee (MPC), said there were risks that UK inflation could persist at higher levels than in the US or the eurozone. Last month the Bank’s monetary policy committee voted by a majority to keep interest rates at the current level of 5.25%, the highest level since the 2008 financial crisis.

Expected Ranges

  • NZD/USD: 0.5900 - 0.6100 ▼
  • NZD/EUR: 0.5440 - 0.5640 ▼
  • GBP/NZD: 2.0880 - 2.1080 ▲
  • NZD/AUD: 1.0760 - 1.0960 ▼
  • NZD/CAD: 0.8050 - 0.8250 ▼

Written by

Brett Ottawa

OFXpert

Brett brings a wealth of experience, boasting more than 15 years in the foreign exchange market. He started his foreign exchange career with OFX more than a decade ago, as a private dealer catering to individual clients. He later transitioned to the corporate sector, assuming the position of Corporate Senior Relationship Manager. What truly excites Brett is the opportunity to engage with people, supporting their business growth and sharing in their successes.