NZD consolidates break above 0.69
Daily Currency UpdateThe NZD opens higher this morning, closing in on a break back above 0.6950 amid a broader USD correction and positive risk-on mood. Markets adopted a more optimistic view of peace talks between Russia and Ukraine as negotiators agreed Russia would scale back its military operations in and around Kyiv in a bid to create mutual trust and a platform to expand negotiations in the future. The optimistic mood prompted a rebound across equities and global rates while driving oil prices lower, forcing the USD lower across the board and allowing the NZD to consolidate an extension back above 0.69 overnight. Having touched intraday highs at 0.6944 the NZD remains steady leading into the morning’s open. With little of note on the day’s domestic ticket our attentions turn to US ADP employment data ahead of Friday's Non-farm payroll print while, bond prices, commodities and peace talks will continue to dominate the broader market narrative.
Key MoversThe positive mood sparked by peace talks between Ukraine and Russia has helped elevated the Euro through trade on Tuesday, while commentary for Japanese officials has helped arrest the Yen recent fall. Following peace talks in Istanbul Russia has announced it will scale back its military operations in and around Kyiv in a bid to create a level of mutual trust as Ukrainian negotiators agree sufficient progress has been made, allowing a meeting between President Zelensky and President Putin to take place. The positive outcome helped bolster European equities and allow the single currency to push back above 1.11. Having touched intraday highs at 1.1127 the currency has tracked lower into the open where it now buys 1.1085.
The Yen is also stronger, having recouped some of the weeks' earlier losses after MoF officials addressed the recent “undesirable” FX movements and the possible impact of the JPY correction on the economy. The open discussion of JPY performance has helped add support to the currency as BoJ policymakers face mounting pressure on their yield curve control policy. Having touched highs at 124.25 the Yen fought back forcing the USD back toward 122 before finding a middle ground to trade at 1.2285 on open this morning.
We anticipate volatility across currency markets will remain in play through the short term as our attentions remain on global rates, bond prices, commodities and the evolving Russia/Ukraine crisis.
- NZD/USD: 0.6880 - 0.7010 ▲
- NZD/EUR: 0.6190 - 0.6320 ▼
- GBP/NZD: 1.8780 - 1.9120 ▲
- NZD/AUD: 0.9180 - 0.9280 ▲
- NZD/CAD: 0.8580 - 0.8720 ▲