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NZD/USD struggles through Monday Trade

Tuesday 8 February, 2022

Daily Currency Update

A resurgent Greenback forced the New Zealand Dollar lower to start the week. Opening this morning at 0.6635, the Kiwi found itself under-pressure throughout most of Monday, slipping to as low as 0.66 at one point before recovering to retake 0.6620 on the back of improved risk sentiment. It was a slow day on the economic calendar with the Kiwi taking its cues from offshore. The story of the day is a moderately stronger Greenback that saw the US Dollar Index increase by 0.2%. Aided by an incredibly strong US non-farm Payrolls report and expectations of a more aggressive tightening monetary policy, the US Dollar found itself on the front foot to start the week and the Kiwi under selling pressure. Moving into Tuesday, the Kiwi turns to RBNZ Governor Orr’s speech for direction.

Key Movers

Wall Street posted modest gains at the opening, but was unable to hold on and dipped in to the red. The Dow Jones index closed flat at 35,091, while the benchmark S&P 500 slid 0.3 per cent to 4,483 and the tech-heavy Nasdaq lost 0.6 per cent to 14,045. Facebook owner Meta Platforms extended its losses, and lost 5 per cent, after its bleak forecast last week caused a record plunge in the social media company's stock market value. On the commodities Iron ore rose $US2.80 or 1.9 per cent to $US149.40 per tonne. On Tuesday, the US will publish the December Trade Balance and minor optimism indexes. The EUR/USD pair started the week gaping higher, but was unable to retain gains and settled at around 1.1420. On the data front, Germany published December Industrial Production, which fell by 0.3% MoM, missing expectations, while the annual reading printed at -4.1% against the market’s forecast of -2.4%. The Euro is currently trading at 1.1441 against the Greenback. We continue to expect support to hold on moves approaching 1.1415 while now any upward push will likely meet resistance around 1.1480.

Expected Ranges

  • NZD/USD: 0.6595 - 0.6674 ▼
  • NZD/EUR: 0.5763 - 0.5829 ▼
  • GBP/NZD: 2.0271 - 2.0516 ▲
  • NZD/AUD: 0.9252 - 0.9363 ▼
  • NZD/CAD: 0.8352 - 0.8452 ▼