New Zealand dollar trades above US$0.62
Monday 20 March, 2023
Daily Currency UpdateThe Kiwi dollar is slightly stronger this morning when valued against the Greenback. The NZD/USD rebounded from the 0.6140-0.6135 area and gained strong follow-through traction for the second successive day on Friday. The NZD/USD pair maintains its bid tone through the early North American session, albeit seems to struggle to capitalise on the move and remains below the 0.6260-0.6270 confluence hurdle, or the weekly high. Friday's price action for NZD/USD is more likely the exploitation of the previous day in the absence of any top-tier data from both the US and New Zealand. The risk sentiment boosted when the Swiss National Bank (SNB) came to rescue Credit Suisse by providing CHF50 billion as a covered loan facility.
On the data front last week New Zealand’s economy missed forecasts for growth in the fourth quarter and instead shrank 0.6%, official data showed on Thursday, raising the chances of a recession and making further interest rate hikes less likely. Gross domestic product failed to meet analysts’ expectations of a 0.2% contraction in the December quarter and was well below the Reserve Bank of New Zealand’s forecast of 0.7% growth. It was a reversal from revised growth of 1.7% seen in the third quarter. Looking ahead this week and there are no scheduled releases today. On Tuesday, Statistics New Zealand will release the monthly Trade Balance figures, while the Reserve Bank of New Zealand will release local Credit Card spending, which is correlated with consumer spending and confidence; rising debt levels are a sign that lenders feel comfortable issuing loans, and that consumers are confident in their financial position and eager to spend money. On Wednesday we will see the Global Dairy Trade (GDT), a leading indicator of the nation's trade balance with other countries as rising commodity prices boost export income, and the Westpac Consumer Sentiment.
Key MoversThe US dollar fell on Friday as further declines in the shares of Credit Suisse and First Republic Bank rattled markets fearful of contagion and increased concerns that a recession lies ahead because of the impact of tighter monetary policy. The fate of Credit Suisse could be decided in the next few days after a torrid week for Switzerland's second biggest bank. Local media reported the Swiss cabinet had gathered for a crisis meeting at 5pm on Saturday (3am, Sunday, AEDT) to discuss the ailing bank's future, as reports swirled of a possible takeover by its biggest Swiss rival, UBS and the potential shedding of up to 10,000 jobs. Investors and customers pulled their money out of Credit Suisse over the past several days as turmoil swept the global banking industry following the collapse of two US lenders.
US stocks fell Friday as investors pulled back from positions in First Republic and other bank shares amid lingering concerns over the state of the U.S. banking sector. The Dow Jones Industrial Average lost 384.57 points, or 1.19%, to close at 31,861.98 points. The S&P 500 slid 1.10% to end at 3,916.64 points, while the Nasdaq Composite was down 0.74% to 11,630.51 points. U.S.-listed shares of Credit Suisse closed down nearly 7% as traders parsed through the bank’s announcement that it would borrow up to $50 billion francs, or nearly $54 billion, from the Swiss National Bank. The stock lost 24% over the course of the week.
- NZD/USD: 0.6150 - 0.6350 ▲
- NZD/EUR: 0.5750 - 0.5950 ▲
- GBP/NZD: 1.9250 - 1.9450 ▲
- NZD/AUD: 1.0550 - 1.0750 ▼
- NZD/CAD: 0.8450 - 0.8650 ▲