Daily Currency Update
The New Zealand dollar is stronger this morning when valued against the Greenback currently trading at 0.6325 at time of writing. On Friday, the NZD/USD pair continued its ascent from Thursday, adding 0.20%, reaching 0.6354 and continuing the bullish trend. The overall outlook for the NZD/USD is bullish. The pair is trading above its key moving averages, and the technical indicators are regaining strength. The 0.6350 level has been an area of significant resistance previously, and at this point I think it’s probably only a matter of time before this market rallies rather significantly. Short-term pullbacks at this point in time will end up being a potential buying opportunities, unless we end up dropping down below the 0.6235 level. Looking ahead this week and all eyes today will be on the ANZ Business Confidence a survey of about 2,000 businesses which asks respondents to rate the relative 12-month economic outlook. It's a leading indicator of economic health - businesses react quickly to market conditions, and changes in their sentiment can be an early signal of future economic activity such as spending, hiring, and investment. On Tuesday Statistics New Zealand will release the latest monthly Building Consents. Finally on Friday we will see the latest monthly ANZ Commodity Price Index.
Key Movers
The US dollar Index (DXY), which measures the value of the USD against a basket of major currencies, stands soft after the release of the US Personal Consumption Expenditures (PCE) data from August. The headline PCE inflation, the Federal Reserve's (Fed) preferred inflation measure, came in softer than expected, while the core PCE inflation matched expectations. U.S. consumer spending increased slightly less than expected in August, but that did little to change expectations that solid economic growth persisted in the third quarter, while the annual rise in prices was the smallest in just over 3-1/2 years. The personal consumption expenditures price index, a gauge the Fed focuses on to measure the cost of goods and services in the U.S. economy, rose 0.1% for the month, putting the 12-month inflation rate at 2.2%, down from 2.5% in July and the lowest since February 2021. The Fed targets inflation at 2% annually. Strong growth expectations this quarter were underscored by other data from the Commerce Department on Friday showing the goods trade deficit narrowed by the most in nearly two years last month. That suggested trade would likely impose a modest drag on gross domestic product, which could be more than offset by a rise in inventories. September's employment report next week could offer more clues on the size of future reductions in borrowing costs. Stock market futures were positive following the report while Treasury yields were negative.
Expected Ranges
- NZD/USD: 0.6250 - 0.6450 ▲
- NZD/EUR: 0.5600 - 0.5800 ▲
- GBP/NZD: 1.0950 - 1.1150 ▼
- NZD/AUD: 1.0800 - 1.1000 ▲
- NZD/CAD: 0.8500 - 0.8700 ▲