New Zealand trades slightly lower driven by domestic economic data
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Daily Currency Update
Over the week the New Zealand dollar (NZD) experienced a slight decline against the US dollar (USD). The NZD/USD exchange rate opened at approximately 0.6001 on Monday, May 26, and closed at around 0.5966 on Friday, May 30, reflecting a decrease of about 0.57% over the week. The USD showed resilience, particularly ahead of the release of the US April Personal Consumption Expenditures (PCE) Price Index report. Additionally, a US Court of Appeals ruling allowed President Trump's tariffs to take effect, which may have supported the USD. While on the local front we saw weaker-than-expected economic data from New Zealand contributed to the NZD's decline. This data release led to a trimming of the NZD's earlier gains, with the currency trading around 0.5960 during the Asian hours on Friday. The ANZ–Roy Morgan Consumer Confidence fell to 92.9 in May, down from 98.3 in April, dampening consumer sentiment, driven by the stubborn high inflation expectations. This scenario continues to weigh on household sentiment. The seasonally adjusted Building Permits depreciated by 15.6% month-on-month in April, as compared to a previous increase of 10.7% (revised from 9.6%) in March.Key Movers
U.S. initial jobless claims increased by 14,000 to a seasonally adjusted total of 240,000. This marks the highest level in five weeks and slightly exceeds economists' expectations of 230,000. Despite this uptick, the labor market remains relatively stable. The four-week moving average of claims decreased to 230,750, and continuing claims—reflecting individuals receiving unemployment benefits—rose to 1.92 million, the highest since 2021 . Analysts attribute the increase in initial claims to seasonal factors, such as the end of the school year and the Memorial Day holiday, rather than a significant rise in layoffs. Overall, while there are signs of easing in the labor market, there is no clear indication of widespread job losses or a significant economic downturn. Annual inflation in the United States (US), as measured by the change in the Personal Consumption Expenditures (PCE) Price Index, declined to 2.1% in April from 2.3% in March, the US Bureau of Economic Analysis reported on Friday. This reading came in below the market expectation of 2.2%. The core PCE Price Index, which excludes volatile food and energy prices, rose 2.5% in the same period, down from the 2.7% increase reported in March and in line with analysts' estimates. The PCE Price Index and the core PCE Price Index both rose 0.1% on a monthly basis.Expected Ranges
- NZD/USD: 0.5900 - 0.6100 ▲
- NZD/EUR: 0.5150 - 0.5350 ▼
- GBP/NZD: 2.2450 - 2.2650 ▲
- NZD/AUD: 1.0700 - 1.0900 ▲
- NZD/CAD: 0.8100 - 0.8300 ▼