Kiwi dollar strengthens ahead of Q3 GDP data release
Thursday 1 January, 1970
Daily Currency UpdateNZD - New Zealand DollarThe New Zealand dollar is slightly stronger this morning when valued against the Greenback. The Kiwi dollar rose to 0.6590 overnight but is trading back down around 0.6575 this morning, up slightly from yesterday’s close. Further upside potential for the NZD reflects our constructive view of the global economic outlook, but tempered by the view that NZ commodity prices might have already peaked after recent strong upward momentum. On the release front yesterday we saw the current account for the September quarter which saw a seasonally adjusted current account deficit was $2.7 billion. The current account deficit for the year ended September 2019 narrowed to $10.3 billion (3.3 percent of GDP) from the $10.6 billion deficit for the September 2018 year (3.6 percent of GDP). Looking ahead today in New Zealand and we will see the release of Q3 Gross Domestic Product (GDP) with the dated data expected to show modest growth of 0.5% q/q. A modest rate of expansion would make the NZ economy one of the strongest in the developed world over the quarter. From a technical perspective, the NZD/USD pair is currently trading at 0.6579. We continue to expect support to hold on moves approaching 0.6550 while now any upward push will likely meet resistance around 0.6590.
Key MoversThe Pound sterling remained under selling pressure yesterday against the Greenback, settling below the 1.3100 figure and nor far above a daily low of 1.3059. The Pound sterling is the softest of the majors, losing further ground after Prime Minister Boris Johnson looked to prevent the UK from extending the Brexit transition process beyond the end of next year. The U.S. dollar rose on Wednesday alongside Treasury yields, boosted for the second straight day by strong economic data earlier this week. Yesterday in the UK the release of November inflation figures, ticked up to 1.5% YoY in November, below the Bank of England’s target and in-line with its recent downtrend. Looking ahead tonight in the UK we will see the release of the Bank of England’s Monetary Policy Meeting where the official cash rate is expected to remain at 0.75%. We will also see the release of monthly Retail Sales figures which is expected to come in at 0.3% an uplift from the previous month -0.1%. From a technical perspective, the GBP/USD pair is currently trading at 1.3080. We continue to expect support to hold on moves approaching 1.3050 while now any upward push will likely meet resistance around 1.3130.
- NZD/USD: 0.6450 - 0.6650 ▲
- NZD/AUD: 0.6500 - 0.9700 ▲
- GBP/NZD: 1.9700 - 1.9900 ▼
- NZD/EUR: 0.5850 - 0.6050 ▲
- NZD/CAD: 0.8550 - 0.8750 ▼