Home Daily Commentaries New Zealand dollar continues to trade above US$0.62

New Zealand dollar continues to trade above US$0.62

Daily Currency Update

The New Zealand dollar is slightly weaker this morning when valued against the Greenback currently trading at 0.6221 at time of writing. The NZD/USD pair faces selling pressure above the crucial resistance of 0.6250 in Friday’s session. On the data front last week New Zealand’s gross domestic product (GDP) fell 0.2% in the June 2024 quarter, narrowly escaping technical recession after a downward revision to the March quarter. The economy grew just 0.1% in the March quarter compared to initial estimates of 0.2%. Two quarters of contraction in a row is the traditional benchmark for a recession. The 0.2% contraction in the June quarter was better than Reserve Bank (RBNZ) forecasts and those of most economists. However, GDP per capita decreased by 0.5% in the quarter. Looking ahead today and Statistics New Zealand will release the latest monthly Trade balance figures.

Key Movers

The US dollar remains under pressure as expectations grow for additional rate cuts by the US Federal Reserve by the end of 2024. The latest dot plot projections indicate a gradual easing cycle, with the median rate for 2024 revised down to 4.375% from the June forecast of 5.125%. The Fed delivered its first interest rate cut decision in more than four years last Wednesday, in which it reduced its key borrowing rates by 50 basis points (bps) to 4.75%-5.00%. The number of Americans filing new applications for unemployment benefits dropped to a four-month low last week, pointing to solid job growth in September and offering confirmation that the economy continued to expand in the third quarter. Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 219,000 for the week ended Sept. 14, the lowest level since the middle of May, the Labor Department said last Thursday. Economists polled by Reuters had forecast 230,000 claims for the latest week. The stock market took a breather Friday with the Dow Jones Industrial Average eked out a 0.1% gain to close at a record high for the second consecutive session. The S&P 500 slid 0.2% from its own record high. The Nasdaq Composite, about 4% off its all-time high, dipped 0.4%. All three indexes advanced about 1.5% over the week. Gold prices climbed past $2,600, recording new all-time highs amid increasing speculation that the Federal Reserve (Fed) will continue to lower borrowing costs.

Expected Ranges

  • NZD/USD: 0.6100 - 0.6300 ▼
  • NZD/EUR: 0.5500 - 0.5700 ▼
  • GBP/NZD: 2.1200 - 2.1400 ▲
  • NZD/AUD: 1.0800 - 1.1000 ▼
  • NZD/CAD: 0.8300 - 0.8500 ▲

Written by

Brett Ottawa

OFXpert

Brett brings a wealth of experience, boasting more than 15 years in the foreign exchange market. He started his foreign exchange career with OFX more than a decade ago, as a private dealer catering to individual clients. He later transitioned to the corporate sector, assuming the position of Corporate Senior Relationship Manager. What truly excites Brett is the opportunity to engage with people, supporting their business growth and sharing in their successes.