Home Daily Commentaries NZD outperforms as all eyes turn to US inflation and central bank

NZD outperforms as all eyes turn to US inflation and central bank

Daily Currency Update

The New Zealand dollar outperformed through trade on Tuesday, unperturbed by a general risk-off mood and weaker yuan. While the AUD traded sideways the NZD advanced 0.4% on the day, marking session highs just shy of US$0.6150 at US$0.6145 and is higher against all key crosses. With the euro on the back foot amid ongoing political uncertainty centred around France's General election the NZD marked fresh four-month highs against the single currency while pushing toward A$0.93 and extending a break above £0.48 against the GBP.
Our attention now turns to US CPI data and FOMC policy updates for direction moving through the rest of the week.

Key Movers

The euro continues to underperform, giving up more ground through trade on Tuesday amid ongoing political uncertainty. The single currency slid below US$1.0750, giving up 0.2% on the day and trading as low as US$1.0720. French equities continued their slide and a distinct risk-off mood enveloped markets as traders questioned whether Macron could hold onto the Presidency if his support is eroded at the June 30 election. Having traded near US$1.09 leading into last week's US non-farm payroll print the euro has suffered a swift and precipitous correction and we expect volatility will continue through this month and leading into the election.
The pound is also on the back foot, following softer than expected labour market data. While wage data showed a jump in the quarterly numbers an increase in the unemployment rate and jobless claims drove calls for the Bank of England to move and cut rates sooner. Market odds are now pricing a near 45% chance of a rate cut by August, up from 36% before the print.
With the USD enjoying early risk-off gains before trading flat for the day our attention turns to tonight’s all-important US CPI inflation print and FOMC policy update. We anticipate inflation should continue to fall as oil and energy prices ease and a print near 3.5% should afford markets some comfort that disinflationary forces are still in play. We expect the Fed will leave rates on hold and our attention will turn to the Fed’s updated dot plot and accompanying rate statement for guidance and direction.

Expected Ranges

  • NZD/USD: 0.6080 - 0.6215 ▲
  • NZD/EUR: 0.5680 - 0.5780 ▲
  • GBP/NZD: 2.0650 - 2.0850 ▼
  • NZD/AUD: 0.9250 - 0.9330 ▲
  • NZD/CAD: 0.8400 - 0.8500 ▲

Written by

Matt Richardson


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.