New Zealand dollar trades above US$0.60
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Daily Currency Update
The New Zealand dollar is slightly stronger this morning when valued against the Greenback, currently trading at 0.6026 at time of writing. The Kiwi dollar gained ground after the release of the Chinese data on Thursday, given the close trade relationship between New Zealand and China. Chinese Imports (YoY) surged by 8.4% in April, surpassing forecasts of 5.4%. Additionally, Exports grew by 1.5%, higher than the anticipated 1.0% gain projected by analysts. These latest figures brought a positive surprise amidst concerns of potential additional tariffs on Chinese goods by the US. However, Trade Balance USD increased to $72.35 billion from March’s reading of $58.55 billion, slightly below the expected $76.7 billion. The Reserve Bank of New Zealand cited higher-than-anticipated inflation pressures in the first quarter as a reason for this stance. Such a decision could provide support for the New Zealand dollar. Looking ahead today and BusinessNZ will release the Performance of Manufacturing Index, a survey of manufacturers asking 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) is trading at 105.35, slightly down. Despite signals of persistently high inflation acknowledged by Federal Reserve (Fed) Chair Jerome Powell and a recent hawkish stance from the Fed, the US dollar seems to be under mild downward pressure on Thursday due to the report of weak Initial Jobless Claims figures. Initial Jobless Claims data, marking 231K applications, overshooting 210K forecast and increased jobless claims underscore anxiety over potential labour market weakness in the US. Upcoming week’s Producer and Consumer inflation data will be crucial, where higher-than-projected figures could minimise rate cut probabilities this year.The Pound sterling erased some of its earlier losses against the US dollar and edged up by 0.03% after the Bank of England’s (BoE) monetary policy decision. The BoE's Monetary Policy Committee voted 7-2 to keep rates at a 16-year high of 5.25%. However, Governor Andrew Bailey said it was possible the central bank would need to cut rates by more than investors currently expect. Money markets are fully pricing in an August rate cut, while placing about a 44% chance on a cut in June. Much will depend on upcoming wage settlement and inflation data. The GBP/USD pair is currently trading at 1.2520 at time of writing.
Expected Ranges
- NZD/USD: 0.5950 - 0.6150 ▲
- NZD/EUR: 0.5500 - 0.5700 ▲
- GBP/NZD: 2.0650 - 2.0850 ▼
- NZD/AUD: 1.0850 - 1.1050 ▼
- NZD/CAD: 0.8150 - 0.9150 ▲