Home Daily Commentaries New Zealand dollar trades above 61 US cents

New Zealand dollar trades above 61 US cents

Tuesday 6 September, 2022

Daily Currency Update

The New Zealand dollar is slightly stronger this morning when valued against the Greenback. It was a quieter session in the domestic rates market yesterday given the US Labor Day holiday, the NZD drifting back below 0.61 and down around 0.2% so far this week.  On the data front yesterday we saw the release of the Australia and New Zealand Banking Group (ANZ) Commodity Price Index which fell 3.3% in August (vs. prior -2.2%). Looking ahead this week and on Wednesday we will see the release of the Global Dairy Trade (GDT) which is a leading indicator of the nation's trade balance with other countries because rising commodity prices boost export income.  Finally on Thursday we will see the release of the quarterly Manufacturing Sales.

Key Movers

After fighting for the leadership of the Conservative Party for more than two months, Liz Truss has finally won the elections and has been elected as the next UK Prime Minister. Ms Truss won 57 per cent of the vote in the race to replace Boris Johnson as the Tory Party’s new leader. Compared to Rishi Sunak’s 42.6 per cent – a narrower than expected victory. Ms Truss inherits a perilous economic situation, with 40-year high inflation and a forecasted lengthy recession at the end of the year. The pound slumped to a near 40-year low against the US dollar on Monday, pushing the currency below pandemic levels to $US1.144 as markets confront UK’s economic prospects and energy crisis. Global stocks were falling Monday as acute fears of an energy crisis rose in Europe and the euro plunged to its lowest level in decades. The euro retreated to a two-decade low, while the dollar strengthened. Investors in the U.S. have a break from the latest tumult in markets for the Labor Day holiday. S&P 500SPX closed down –1.07%  futures rose 0.2% with tech stock-heavy Nasdaq COMP –1.31% while futures ended 0.3% higher. In Asia, Tokyo’s Nikkei 225 shed 0.1%, while Hong Kong’s Hang Seng Index retreated 1.2% as new Covid-19 restrictions in China spooked investors.

Expected Ranges

  • NZD/USD: 0.6000 - 0.6200 ▲
  • NZD/EUR: 0.6050 - 0.6250 ▲
  • GBP/NZD: 1.8800 - 1.9000 ▼
  • NZD/AUD: 1.1050 - 1.1250 ▼
  • NZD/CAD: 0.7900 - 0.8100 ▲