Home Daily Commentaries New Zealand dollar continues to trade above US$0.60

New Zealand dollar continues to trade above US$0.60

Brett Ottawa
Written by
Brett Ottawa

Brett Ottawa

OFXpert

Brett brings a wealth of experience, boasting more than 15 years in the foreign exchange market.

| Thursday 28 March, 2024

Daily Currency Update

The New Zealand dollar is relatively unchanged this morning when valued against the Greenback, currently trading at US$0.6005 at the time of writing. The Kiwi asset is vulnerable in the broader term as the New Zealand economy has shifted into a technical recession. The economy was contracted in the last two quarters of 2023.

The 50-period Exponential Moving Average (EMA) near US$0.6040 is a major barricade for the New Zealand dollar bulls. If the asset breaks below the intraday low of US$0.5987, more downside will appear. This would drag the asset toward the November 17 low at US$0.5940, followed by the round-level support of US$0.5900.

Looking ahead today, we will see the ANZ Business Confidence Survey. A survey of about 1,500-2,000 businesses asks respondents to rate the relative 12-month economic outlook. A leading indicator of economic health - businesses react quickly to market conditions, and changes in their sentiment can be an early signal of future economic activity such as spending, hiring and investment.

Key Movers

The US dollar Index saw its second consecutive day of gains amid a risk-off sentiment, driven by anticipation surrounding the upcoming release of US Personal Consumption Expenditures (PCE) scheduled for Friday. However, the decline in US Treasury yields may be attributed to the expectations surrounding the US Federal Reserve regarding potential rate cuts. This sentiment could limit the advances of the US dollar.

On the data front, US durable goods orders increased by 1.4% in February, against the 1.3% expected and previous decline of 6.9%. US durable goods orders excluding defense rose by 2.2% in February, compared to the expected 1.1% and 7.9% previous decline. US Housing Price Index decreased MoM by 0.1% in January, against the December’s increase of 0.1%.

The Pound sterling fell to near 1.2600 in Wednesday’s early American session. The broader appeal remains weak as investors expect the Bank of England (BoE) will start reducing interest rates sooner than previously anticipated. The BoE said last week in its monetary policy statement that the central bank is not at a point where interest rates can be reduced. However, policymakers didn’t rule out the market’s view of two or three rate cuts this year.

Investors will keenly focus on the United States core Personal Consumption Expenditure Price Index (PCE) data for February, published on Good Friday. The annual Core PCE is forecasted to have grown at a steady pace of 2.8%.

Daily Commentary will be on break for the long weekend from Friday, March 29th to Monday, April 1st and will resume Tuesday, April 2nd.

Expected Ranges

  • NZD/USD: 0.5900 - 0.6100 ▲
  • NZD/EUR: 0.5440 - 0.5640 ▲
  • GBP/NZD: 2.0940 - 2.1140 ▲
  • NZD/AUD: 1.0780 - 1.0980 ▼
  • NZD/CAD: 0.8040 - 0.8240 ▲

Written by

Brett Ottawa

OFXpert

Brett brings a wealth of experience, boasting more than 15 years in the foreign exchange market. He started his foreign exchange career with OFX more than a decade ago, as a private dealer catering to individual clients. He later transitioned to the corporate sector, assuming the position of Corporate Senior Relationship Manager. What truly excites Brett is the opportunity to engage with people, supporting their business growth and sharing in their successes.