Daily Currency Update
The New Zealand dollar is weaker this morning when valued against the Greenback currently trading at 0.5938 at time of writing. The NZD/USD currency pair has extended its downtrend, with bears maintaining a firm grip as selling momentum builds. Reserve Bank of New Zealand Governor Adrian Orr recently reaffirmed the central bank’s capability to maintain low and stable inflation, noting that the bank is vigilant and ready to act should market conditions necessitate intervention. These comments have solidified market expectations of a potential RBNZ rate cut in November, with a 50-basis-point reduction widely anticipated. Some speculate that a more aggressive cut of 75 basis points could be on the table if conditions worsen. On the local front this week all eyes will be on Thursday's ANZ Business Confidence which is 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. On Friday Statistics New Zealand will release the latest monthly building consents. There are no scheduled releases today due to the bank holiday.
Key Movers
The US dollar Index (DXY), which gauges Greenback’s value against six major currencies, hovers near 104.00. The downside in the US dollar appears to be limited due to growing expectations that the Federal Reserve’s (Fed) policy-easing approach would be more gradual than what was previously anticipated for the remaining year and that former US President Donald Trump will win national elections on November 5. The US economy remains robust with GDP Now tracking third-quarter growth at 3.4%. The strong economic outlook might push the Federal Reserve (Fed) to adopt a more cautious stance. Investors, meanwhile, are confident of two cuts by the end of 2024. The US economy remains robust with the Atlanta Fed's GDP Now model tracking Q3 growth at 3.4% and the New York Fed's Nowcast model projecting 3.0% growth for Q3 and 2.6% growth for Q4. Dow's stock price has decreased 8.1% so far this year, much less than the 12.4% advance registered by the overall Dow Jones Industrial Average (DJIA) index. On Friday, the DJIA fell by 0.6% to close at 42,114 points. The three leaders were Intel (INTC), Salesforce (CRM) and Microsoft (MSFT), while the three laggards were McDonald's (MCD), Goldman Sachs (GS) and Dow (DOW).
Expected Ranges
- NZD/USD: 0.5850 - 0.6050 ▼
- NZD/EUR: 0.5400 - 0.5600 ▼
- GBP/NZD: 2.1450 - 2.1650 ▲
- NZD/AUD: 1.0850 - 1.1050 ▲
- NZD/CAD: 0.8150 - 0.8350 ▼