Home Daily Commentaries NZD underperforms amid risk off mood

NZD underperforms amid risk off mood

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.

| Friday 16 May, 2025

Daily Currency Update

The New Zealand dollar fell through trade on Thursday, sliding back below US$0.59 amid a risk off shift. There appears no real catalyst for the shift in sentiment outside the ongoing uncertainty that surrounds the global trade and geopolitical landscape. Having tracked within a narrow range for much of the domestic session, the NZD fell steadily overnight, sliding off session highs at US$0.5909 and pitching below US$0.5880. As one of the day’s worst performers the NZD also gave up ground against key crosses, tracking lower against the euro, GBP and yen.

Our attentions turn now to NZ business PMI numbers and the RBNZ inflation expectations. PMI numbers will provide a valuable insight into the domestic manufacturing sector. We are looking for any signal that tariffs may have dented the upswing seen in March, while RBNZ rate expectations will help shape cash rate pricing.

Key Movers

Safe haven currencies carried the day on Thursday with the CHF and JPY outperforming all other majors, while commodity sensitive currencies propped up to the bottom of the leaderboard. Softer than anticipated US retail sales and PPI data prompted a correction in US treasuries, allowing the yen to force the USD back below 146, while CHF gains suggest a risk off mood enveloped investors. Perhaps a correction or moment of consolidation after the rally enjoyed in the wake of the US/China 90-day tariff moratorium. The USD DXY index gave up 0.8%, while the euro edged back above 1.12 and sterling jumped above 1.33. The pound outperformed most counterparts after Q1 GDP numbers surprised to the upside. Led by an upswing in business investment, the economy grew 0.7% in the three months to March, making the UK the fastest growing major economy through the start of 2025.

Our attentions turn now to Japanese Q1 GDP data and US consumer sentiment as macroeconomic markers guiding direction into the weekly close.

Expected Ranges

  • NZD/USD: 0.5820 - 0.5920 ▼
  • NZD/EUR: 0.5200 - 0.5300 ▼
  • GBP/NZD: 2.2400 - 2.2800 ▲
  • NZD/AUD: 0.9100 - 0.9200 ▲
  • NZD/CAD: 0.8150 - 0.8250 ▼

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.