NZD plumbs new lows as across key major counterparts
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Daily Currency Update
It was a relatively uneventful Tuesday with no major headline newsflow and limited key macroeconomic items on the agenda, yet the NZD sell-off continued. Lower commodity prices continue to weigh on the currency, while an extension in the risk-off narrative forced the NZD toward intraday lows only just above US$0.5950. The NZD has been the worst-performing major of the last month giving up over 2.5%. With other majors tracking within narrower trading handles the NZD has underperformed across the board sliding below £0.55 against the euro and £0.4650 pounds, while JPY intervention and outperformance has seen the NZD tumble off highs approaching ¥99.00 back below ¥92.70.Our attention now turns to a slew of European, UK and US PMI data sets and the Bank of Canada policy meeting for direction through trade on Wednesday.
Key Movers
With little headline newsflow to drive direction and a light macroeconomic calendar, most majors tracked within a narrow range on Tuesday. US equities were flat and treasury yields edged lower, while the euro and GBP offered little to excite investors. The JPY however outperformed for a 2nd consecutive day as markets managed short positions ahead of next week’s Bank of Japan policy meeting. Analysis suggests there is a 50/50 chance of a token 10 basis point rate hike with calls growing for a more meaningful adjustment in the face of rising inflation. The USD gave up 1% and now trades at ¥155.57.Our attention now turns to UK, eurozone, and US manufacturing and Services PMI data, while commentary from European Central Bank speakers and the Bank of Canada policy meeting round out the ticket.
Expected Ranges
- NZD/USD: 0.5920 - 0.6020 ▼
- NZD/EUR: 0.5450 - 0.5520 ▼
- GBP/NZD: 2.1400 - 2.1700 ▲
- NZD/AUD: 0.8950 - 0.9050 ▲
- NZD/CAD: 0.8180 - 0.8280 ▼