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NZD forced off 0.70 amid risk off mood

Friday 1 April, 2022

Daily Currency Update

The NZD shifted lower through trade on Thursday, succumbing to a broad risk off tone and a general month end correction. Having eyed a break above 0.70 and tracking near 0.6980 through the early hours of the domestic session, the NZD slipped below 0.6950 following softer than anticipated Chinese PMI data. Both manufacturing and non-manufacturing gauges fell below 50, the linear point that dictates expansion or contraction. Tumbling past expectations to touch 48.4, COVID lockdowns appear to be having an even greater impact with figures for April expected to be even worse as restrictions tighten. The soft print prompted a pessimistic tone to permeate currency markets pushing the NZD toward intraday lows at 0.6930. Unable to recover through the overnight session we open this morning buying 0.6932 US cents. Domestic consumer confidence headlines the local macroeconomic impact, but is unlikely to offer much in way of price action. Instead our attentions turn now to US non-farm payroll data and euro area inflation data for direction into the weekly close.

Key Movers

Safe haven currencies carried the day, buoyed by a risk off backdrop and fall in oil prices. Global rates tracked lower while equity markets were soft, as investors failed to kick a risk off mood that emerged on the heels of weaker than anticipated Chinese PMI data, while oil prices dropped following reports the US would release approximately 180 million barrels from its strategic reserve in an attempt to control supply shortages and ease further energy led inflationary pressures. The USD advanced across the board with the exception of the yen. Some sense of normality has returned to JPY trading, with the embattled unit recovering to force the dollar back below 122 to 121.50. Our attentions turn now to US non-farm payroll data and euro area inflation data for direction into the weekly close.

Expected Ranges

  • NZD/USD: 0.6880 - 0.7020 ▼
  • NZD/EUR: 0.6220 - 0.6320 ▲
  • GBP/NZD: 1.8780 - 1.9020 ▲
  • NZD/AUD: 0.9200 - 0.9300 ▼
  • NZD/CAD: 0.8620 - 0.8720 ▼