Home Daily Commentaries NZD steady as eye turn to Jackson Hole

NZD steady as eye turn to Jackson Hole

Matt Richardson
Written by
Matt Richardson

Matt Richardson

OFXpert

Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange.

| Thursday 22 August, 2024

Daily Currency Update

The New Zealand dollar edged higher through trade on Wednesday, gliding through US$0.6150 amid a softer US dollar backdrop. US treasury yields retreated and the USD marked fresh 2024 lows after the minutes showed the majority of members thought “it would likely be appropriate to ease policy at the next meeting…the upside risks to the inflation outlook have diminished while the downside risk to employment have increased”. With focus now shifting away from inflation pressures and toward protecting the labour market, expectations for a swift correction in the cash rate through the back of 2024 are now firmly in play. Having touched intraday highs at US$0.6165 a move back toward resistance at US$0.6220 is now on the cards. Domestic economic conditions and RBNZ rate expectations could continue to act as a headwind and perhaps dampen cross rate gains.

Our attentions now turn to US, European and UK services and Manufacturing PMI data ahead of US jobless claims and the beginning of the Jackson Hole Symposium. Markets will be looking for any signal from Federal Reserve Chair, Jerome Powell as to whether the Federal Open Market Committee will issue a 50-point cut when it next meets in September.

Key Movers

The Great British Pound set an imposing tone through trade on Wednesday, surging through 1.3050 and 1.3100 amid extended US dollar softness. The pound, along with the yen, have been key benefactors of this latest US dollar rebalancing as market expectations fade for a Bank of England rate cut before the November policy meeting. Sterling marked intraday highs at 1.3116 while the EUR, CHF and JPY all jumped 0.3% with the euro closing in on 1.12 and the yen forcing the dollar back below 145. With the Fed’s July meeting minutes confirming policymakers are poised to loosen financial conditions, our attentions turn to the Jackson Hole Symposium and a slew of service and manufacturing PMI’s for a signal as to whether a 50 point cut is on the table.

Expected Ranges

  • NZD/USD: 0.6080 - 0.6220 ▲
  • NZD/EUR: 0.5480 - 0.5580 ▼
  • GBP/NZD: 2.1150 - 2.1350 ▲
  • NZD/AUD: 0.9100 - 0.9200 ▲
  • NZD/CAD: 0.8300 - 0.8400 ▼

Written by

Matt Richardson

OFXpert

As a Senior Corporate Client Manager, Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange. Matt has clients who he has been working with for over a decade, a testament to his knowledge and dedication in the field. Matt is also a regular contributor on Ausbiz, offering clear and precise updates on currency market trends, showcasing his ability to interpret complex financial data into actionable insights.

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