Home Daily Commentaries NZD edged lower as Chinese yuan marks new 2024 low

NZD edged lower as Chinese yuan marks new 2024 low

Matt Richardson
Written by
Matt Richardson

Matt Richardson

OFXpert

Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange.

| Wednesday 4 December, 2024

Daily Currency Update

The NZD tracked with a narrow range on Tuesday, consolidating below US$0.59 and closing lower on the day. With little domestic data on hand, the NZD succumbed to a spillover in Chinese yuan weakness as the world’s second-largest economy saw its currency weaken and mark a fresh 2024 low, almost touching ¥7.30. Market concern surrounding the impact of potential tariffs has weighed on the yuan since the US election. If officials allow the yuan to weaken and President-Elect Trump pushes a significant extension in export tariffs, the NZD could test pandemic lows through Q1 next year.

Our attention today turns to US private payroll numbers and ISM services data, while political and geopolitical developments dominate sentiment and headlines.

Key Movers

The biggest move overnight has been in the Korean won which tumbled following the stunning declaration of Martial Law by the South Korean President. The move comes after months of political wrangling and impasse as the President’s minority government battles the main opposition party. While lawmakers immediately and unanimously voted to lift martial law military leaders refused announcing they would uphold Martial Law until otherwise ordered by the President. Korean assets and the won plunged nearly 3% before a pledge of support helped ease market fears. There was little spillover into other currencies and price action across majors has otherwise been relatively subdued. The Chinese yuan faced increased selling pressure and the USD/CNY pushed toward ¥7.30. With no fresh political developments in France, the euro has recovered some of Monday’s losses, edging back above US$1.05. With lawmakers holding a no-confidence vote this evening we wait to see whether Macron will be forced to appoint a new Prime Minister.

Our attention now remains on French politics while US private payroll data and ISM services data will provide a key snapshot of US economic health.

Expected Ranges

  • NZD/USD: 0.5820 - 0.5920 ▼
  • NZD/EUR: 0.5520 - 0.5620 ▼
  • GBP/NZD: 2.1400 - 2.1700 ▲
  • NZD/AUD: 0.9000 - 0.9100 ▼
  • NZD/CAD: 0.8200 - 0.8300 ▲

Written by

Matt Richardson

OFXpert

As a Senior Corporate Client Manager, Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange. Matt has clients who he has been working with for over a decade, a testament to his knowledge and dedication in the field. Matt is also a regular contributor on Ausbiz, offering clear and precise updates on currency market trends, showcasing his ability to interpret complex financial data into actionable insights.