New Zealand dollar trades below 60 US cents
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Daily Currency Update
The New Zealand dollar is slightly weaker this morning when valued against the Greenback, currently trading at 0.5994 at time of writing. This fall in the Kiwi dollar was likely influenced by the Federal Reserve's (Fed) sentiment of maintaining higher interest rates for an extended period. Furthermore, hawkish remarks from Minneapolis Fed President Neel Kashkari have strengthened the US Dollar, thereby exerting downward pressure on the NZDUSD pair. On the data front, prices have risen slightly in the overnight Global Dairy Trade (GDT) auction, with a 1.8 per cent increase across the board. This is after a modest 0.1 per cent bump in the last event, held on April 16. Whole milk powder, which has the biggest impact on Fonterra’s farmgate milk price, recorded a solid 2.4 per cent lift, to an average of US$3350/MT. This means the midpoint remains unchanged from the co-op’s previous milk price announcement on February 12, when the range was $7.30-$8.30/kgMS. Looking ahead for the rest of the week and on Friday, BusinessNZ will release the Performance of Manufacturing Index a survey of manufacturers that asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.Key Movers
The US Dollar Index (DXY), which gauges the performance of the US dollar (USD) against six major currencies, edges higher to near 105.50. The higher US Treasury yields provide support for the Greenback. The 2-year and 10-year yields on US Treasury bonds stand at 4.84% and 4.47%, respectively, by the press time. The Dow Jones Industrial Average (DJIA) recovered from an early dip during the American trading session, climbing to an intraday high above 39,000.00 as the major equity index broke away from the crowd. The Dow Jones is on pace for a fifth consecutive gainer, climbing from the last swing low into 37,600.00. Looking ahead this week and due to the absence of top-tier United States economic data, investors will focus on speeches from policymakers: Fed Vice Chair Philip Jefferson, President of the Federal Reserve Bank of Boston Susan Collins and Fed Governor Lisa Cook to project the next move in the US Dollar.The Pound Sterling slipped below the psychological support of 1.2500 against the Greenback in Wednesday’s early New York session due to the ongoing uncertainty ahead of the Bank of England’s (BoE) interest rate decision, which will be announced on Thursday. Interest rates in the United Kingdom are expected to remain steady at 5.25% for the sixth time in a row. However, the BoE could turn slightly dovish on the interest rate outlook as policymakers are confident that the headline inflation could have returned to the desired rate of 2% in April.
Expected Ranges
- NZD/USD: 0.5900 - 0.6100 ▼
- NZD/EUR: 0.5500 - 0.5700 ▼
- GBP/NZD: 2.0700 - 2.0900 ▲
- NZD/AUD: 1.0840 - 1.1040 ▲
- NZD/CAD: 0.8100 - 0.8300 ▼