New Zealand dollar trades below 65 US cents
Monday 30 January, 2023
Daily Currency UpdateThe Kiwi dollar is slightly weaker this morning when valued against the Greenback trading at 0.6463 at the time of writing. Currency markets showed little net movement on Friday. The NZD spent most of the day (and week) hovering just under 0.65 and closed the week just under that level. On the local data front on Friday, the NZ ANZ business outlook survey showed some recovery in activity indicators from the disastrous December survey while the inflation indicators remained robust, with pricing intentions pushing higher, with a net 62% of businesses intending to increase prices, still too high for comfort against a historical average closer to 25%. Heavy rainfall hit New Zealand's north island again on Sunday, causing landslides, flash floods, and knocking out roads, with the death toll rising to four after a person who had been missing was confirmed dead. Battered by rain since Friday, Auckland, New Zealand's largest city of 1.6 million people, remained under a state of emergency. On Friday evening, more than 15 centimeters of rain fell in just three hours in some places. Looking to the week ahead and today Statistics New Zealand will release the monthly Trade Balance figures. However all eyes this week will be on Wednesday’s Unemployment Rate release. Although it's generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. The jobless rate is expected to remain at 3.3%. Finally, on Friday we will see monthly Building Consents.
Key MoversOn Friday in the United States Core PCE Price Index came out at 0.3% MoM, slightly above 0.2% estimates and 0.2% previous MoM, and at 4.4% YoY from 4.7% previously. The slight gain in core inflation gave some marginal support to the US Dollar as it reduces the chances the Federal Reserve will turn dovish later in the year, but so far the currency has failed to follow through its initial lift to the upside. Markets still expect less aggressive policy tightening by the Federal Reserve, and are pricing in a smaller 25 bps Fed rate hike move in February, which keeps a lid on any meaningful upside for the Greenback. Friday's US economic calendar also featured the release of Pending Home Sales data and the revised Michigan Consumer Sentiment Index, both of which came in above estimates, with Home Sales registering an unexpected 2.5% rise in December versus the -0.9% expected. The focus now shifts to the outcome of a two-day FOMC monetary policy meeting, scheduled to be announced next Wednesday. Heading into the key event risk, the major is more likely to prolong its consolidative price move. The US S&P500 was up 0.25% on Friday, taking its weekly gain to 2.5% while the Nasdaq index rose just under 1% for a weekly gain of 4.3%, the latter supported by some support for tech stocks and Tesla’s 33% gain over the week, with the company delivering on an anticipated strong result.
- NZD/USD: 0.6350 - 0.6550 ▼
- NZD/EUR: 0.5850 - 0.6050 ▼
- GBP/NZD: 1.8900 - 1.9100 ▲
- NZD/AUD: 1.0800 - 1.1000 ▼
- NZD/CAD: 0.8500 - 0.8700 ▲