Daily Currency Update
The New Zealand dollar is slightly stronger this morning when valued against the Greenback, currently trading at 0.6009 at time of writing. NZD/USD gains ground as the US dollar (USD) faced downward pressure following the release of the Federal Reserve’s (Fed) Beige Book on Wednesday. However any upside of the New Zealand dollar (NZD) could be limited due to rising odds of another rate cut in November by the Reserve Bank of New Zealand (RBNZ), with inflation easing and economic output remaining sluggish. More downside is highly likely towards the August 15 low of 0.5974 and the round-level support of 0.5900 if the pair breaks below the psychological support of 0.6000. On the flip side, a reversal move above the October 8 high of 0.6146 will drive the asset towards the 50-day EMA at 0.6173 and the October 4 high near 0.6220. On the data front there are no scheduled releases today. Next week on Monday is a bank holiday leaving the next scheduled release the ANZ Business Confidence on Thursday.
Key Movers
The US Dollar Index (DXY), which measures the value of the USD against a basket of six currencies, retreated on Thursday, giving up some of the gains accumulated during a solid week marked by a stellar performance. The markets have fully priced out the possibility of a more aggressive policy easing by the Federal Reserve (Fed), as the recent US macro data suggested that the economy remains on strong footing. The CME FedWatch Tool indicates a 90% probability of a 25-basis-point rate cut at the November 7 Fed meeting. In other news, the flash US S&P Global October Composite PMI came in at 54.3, slightly above estimates, with services expanding at 55.3 and manufacturing contracting for the third straight month. Despite the overall PMI improvement, employment in the US fell slightly for the third month, reflecting uncertainty ahead of the upcoming presidential election.
Expected Ranges
- NZD/USD: 0.5900 - 0.6100 ▲
- NZD/EUR: 0.5450 - 0.5650 ▲
- GBP/NZD: 2.1400 - 2.1600 ▼
- NZD/AUD: 1.0900 - 1.1100 ▼
- NZD/CAD: 0.8200 - 0.8400 ▲