Home Daily Commentaries New Zealand dollar is steady around US$0.63

New Zealand dollar is steady around US$0.63

Wednesday 21 December, 2022

Daily Currency Update

The New Zealand dollar has changed little this morning when valued against the US dollar, trading at US$0.6343 at the time of writing. The New Zealand Dollar traded sideways again on Tuesday’s Asian session, finding strength on tentative optimism in the currency markets. The NZD/USD dropped to test the US$0.6300 area after the beginning of the American session. Buyers again appeared and pushed the pair back to the US$0.6340 area. On a technical outlook, the NZD/USD rebounds after holding above US$0.6300. A break lower would open the doors to more losses. The next relevant support is seen at US$0.6250. On the data front, New Zealand Business confidence has plummeted to a fresh record low in December, down 13 points to -70. Expected own activity fell from -14 to -26. Analysts at ANZ Bank said that the “Reserve Bank of New Zealand appears to have achieved shock value with its sharp increase in the OCR, hawkish forecasts, and warning of deliberate recession in 2023. Many indicators are around Global Financial Crisi lows. Inflation pressures remain intense. Wage expectations jumped.” Looking ahead today, we will see the release of Statistics New Zealand’s monthly Trade Balance figures and ANZ Business Confidence, a leading indicator of economic health.

Key Movers

The Japanese yen surged to a four-month high against the US dollar on Tuesday after the Bank of Japan stunned markets with a surprising tweak to its bond yield control program. While it kept broad policy settings unchanged, pinning short-term JGB yields at -0.1% and the 10-year yield around zero, the Bank of Japan decided to let long-term yields move 50 basis points on either side of its 0% target, wider than the 25 basis point band previously. The move rattled investors already worried about the economic fallout of rising interest rates and untameable inflation around the globe. The dollar was down 3.6% against the Japanese currency at ¥131.95. It hit a low of ¥131.83, a level last seen in mid-August. The timing of the move surprised since most Bank of Japan watchers had expected no changes until the current governor Haruhiko Kuroda's 10-year term ends at the end of March. In other news, the EUR/USD pair was unable to advance beyond US$1.0650 and finished another day with little changed, just above the US$1.0600 level. While the GBP/USD pair seesawed between gains and losses but finished the day flat at US$1.2150. The USD/CAD pair finished the day in the red at around CA$1.3610, with the CAD underpinned by higher oil prices. WTI settled at $76.25 a barrel. Canada will publish November inflation figures on Wednesday.

Expected Ranges

  • NZD/USD: 0.6250 - 0.6450 ▼
  • NZD/EUR: 0.5850 - 0.6050 ▼
  • GBP/NZD: 1.9100 - 1.9300 ▲
  • NZD/AUD: 1.0400 - 1.0600 ▼
  • NZD/CAD: 0.8550 - 0.8750 ▲