Home Daily Commentaries New Zealand dollar pulls off three-month highs

New Zealand dollar pulls off three-month highs

Daily Currency Update

NZD - New Zealand Dollar

The New Zealand dollar finished the week 0.6% lower despite seeing a three-month high of 0.7151 to open the week on Monday. Visitor arrival numbers declined 41.4% for the month as expected given lockdown measures in Auckland continued despite a drop in Covid cases on Friday. Opening at 0.7105 on Friday, the NZD/USD reached a new three month high of 0.7156 during the European market session.

The eventual decline for the local currency occurred in offshore markets into the weekly close as Iron Ore sunk to one-year lows. Covid recovery concerns continue to spook markets and the risk that the global economy stalls amid the latest Delta variant outbreak. A stronger than expected PPI number in the United States stabilised the greenback as the NZD/USD closed flat at 0.7107.

Investors look toward the latest GDP figure due for release on Thursday. The New Zealand dollar opens this morning at 0.7110. We expect support levels to hold onto moves approaching 0.7080, while any upward push will likely meet resistance at 0.7160.

Key Movers

U.S. producer prices rose 0.7% in August and its biggest annual gain in nearly 11 years. High inflation is expected to remain a concern as supply chains continue to be tested during the pandemic. Transportation and warehouse prices led the numbers increasing 2.8% along with food prices at 2.9%. The US Dollar Index (DXY) which measures a basket of currencies against the worlds most traded currency was steady, rising a modest 0.13% on the day to 92.64.

Elsewhere the Canadian economy showed signs of improvement as the latest labour release showed an increase in jobs of 90,000 added in August and the unemployment rate declined to 7.1% for the year.

GBP/USD pulled back 0.07% from monthly highs as construction output and GDP figures for the month both came in weaker. The EUR/USD finished the day 0.13% lower as several Eurogroup meetings took place on Friday evening.

This week markets will be centrally focused on inflation prints as several G-10 countries release their figures for the month. Retail sales and the latest Philly Fed Manufacturing Index in the United States are also due for release on Thursday evening.

Expected Ranges

  • NZD/USD: 0.7080 - 0.7160 ▼
  • NZD/EUR: 0.9630 - 0.9720 ▲
  • GBP/NZD: 1.9350 - 1.9550 ▼
  • NZD/AUD: 0.6000 - 0.6050 ▲
  • NZD/CAD: 0.8980 - 0.9050 ▲