New Zealand dollar trading below US$0.60
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Daily Currency Update
The New Zealand dollar is weaker this morning when valued against the Greenback currently trading at 0.5925 at time of writing. NZD/USD depreciates as the New Zealand dollar (NZD) receives downward pressure from the concerns about Donald Trump’s proposals to raise tariffs on Chinese goods, given that New Zealand is a close trading partner to China. Last week on the data front New Zealand's unemployment rate went up in the September quarter to reach a new high in nearly four years, according to the latest data from Stats NZ. The Household Labour Force Survey revealed a 4.8% unemployment rate in the September 2024 quarter. That’s up slightly from 4.6% in the previous quarter. The employment rate also declined to 67.8% in the September 2024 quarter, down from 68.4% in the previous quarter and 69.3% a year ago. Overall, the labour force participation rate in September 2024 was down to 71.2%, a decrease of 0.5 percentage points from the previous quarter. Looking ahead this week and today the Reserve Bank of New Zealand (RBNZ) will announce the quarterly Inflation Expectations. Expectations of future inflation can manifest into real inflation, primarily because workers tend to push for higher wages when they believe prices will rise. On Wednesday we will see the release of the monthly Visitor Arrivals. While on Friday we will see the release of the BusinessNZ Manufacturing Index which is a survey of manufacturers which 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 measures the value of the US dollar against the other six major currencies, improves to near 104.50 with 2-year and 10-year yields on US Treasury bonds standing at 4.20% and 4.33%, respectively, at the time of writing. Profit taking from post-election rally pushed the price lower, but relatively hawkish Fed rate cut is expected to further underpin the US currency. Fed cut rates by 25 basis points as widely expected and Chair Powell signaled in his post-policy meeting speech that the central bank is starting to assess the new economic landscape after Donald Trump enters the White House. Federal Reserve Chair Jerome Powell highlighted that the US central bank will continue to monitor economic data to guide the "pace and destination" of future rate adjustments, noting that inflation is gradually easing toward the Fed’s 2% target. Investors are now focused on the upcoming preliminary US Michigan Consumer Sentiment report, due on Friday.The Dow Jones Industrial Average (DJIA) rose into fresh all-time highs on Friday, clipping into 44,000 as stocks lean firmly bullish to close out a record week. The Dow had its best week since October of 2023, rising nearly 5% and piercing record bids three days in a row. The University of Michigan (UoM) Consumer Sentiment Index rose to 73.0 in November, overshooting the expected print of 71.0 and climbing further above October’s 70.5 as polled consumers tilt cautiously optimistic regarding the overall state of the US economy. On the downside, 5-year Consumer Inflation Expectations also ticked higher once again, rising to 3.1% compared to the previous print of 3.0%.
Expected Ranges
- NZD/USD: 0.5850 - 0.6050 ▼
- NZD/EUR: 0.5400 - 0.5600 ▼
- GBP/NZD: 1.0850 - 1.1050 ▲
- NZD/AUD: 2.1400 - 2.1600 ▲
- NZD/CAD: 0.8100 - 0.8300 ▼