New Zealand dollar trades below 63 US cents
Monday 6 February, 2023
Daily Currency UpdateThe Kiwi dollar is slightly weaker this morning when valued against the Greenback trading at 0.6296 at the time of writing. The Kiwi dollar edged lower for the second successive day on Friday and moved away from its highest level since June 2022 touched the previous day. From a technical perspective, repeated failures to find acceptance above the 65 US cent psychological mark could be seen as signs of bullish exhaustion. That said, it will still be prudent to wait for strong follow-through selling before confirming that the NZD/USD pair has topped out in the near term and positioning for any meaningful corrective pullback. Looking to the week ahead and on Monday there are no scheduled releases with the Bank holiday. On Tuesday the Australia and New Zealand Banking Group (ANZ) will release the monthly Commodity Price Index which tends to have a muted impact because the tightly-correlated Australian commodity prices are usually released a few days earlier. On Wednesday we will see the release of the Global Dairy Trade (GDT) the weighted-average price of the 9 dairy products sold at auction are sampled and then compared to the previous sampling and a leading indicator of the nation's trade balance with other countries because rising commodity prices boost export income. Finally on Friday BusinessNZ will release the Performance of Manufacturing Index a survey of manufacturers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.
Key MoversOn Friday in the United States US jobs data surprised investors as further Federal reserve action is now expected. The US Department of Labor (DoL) revealed January data that surprised investors, with Nonfarm Payrolls smashing expectations after the economy created 517K jobs in the month, exceeding estimates for the creation of just 185K jobs. Consequently, the Unemployment Rate fell to 3.4% from 3.5%, while December’s figures were revised upward. Average Hourly Earnings, sought by the US Federal Reserve as a measure of wages inflation, linked to last week’s Employment Cost Index (ECI), came in at 0.3% MoM, in line with forecasts but lower than December’s report. Job growth was widespread, led by gains in leisure and hospitality, professional and business services, and health care. Employment also increased in government, partially reflecting the return of workers from a strike. Last week the Federal Open Market Committee (FOMC) announced a 25 basis point increase in its benchmark rate range to 4.50 – 4.75 percent. The increase was a further step down in pace from the 50 bp increase in December and the 75 bp hike in November. On Wall Street, the Nasdaq 100 and Dow Jones fell -1.59% and -0.38% Friday. Still, the former ended the period in the green. Across the Atlantic Ocean, the FTSE 100 and DAX 40 rose 1.76% and 1.91%, respectively. Things were more pessimistic in Asia, with the Hang Seng Index sinking by 4.53%.
- NZD/USD: 0.6200 - 0.6400 ▼
- NZD/EUR: 0.5700 - 0.5900 ▼
- GBP/NZD: 1.8900 - 1.9100 ▲
- NZD/AUD: 1.0750 - 1.0850 ▼
- NZD/CAD: 0.8350 - 0.8550 ▲