Home Daily Commentaries NZD eyes new 2024 low as US dollar extends post-election rally

NZD eyes new 2024 low as US dollar extends post-election rally

Matt Richardson
Written by
Matt Richardson

Matt Richardson

OFXpert

Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange.

| Thursday 14 November, 2024

Daily Currency Update

The New Zealand dollar's downtrend continued through trade on Wednesday amid extended US dollar upside. The US dollar's post-election upswing showed little sings of slowing, despite a correction in front end treasury yields and rising expectations for another Federal Reserve rate cut. The NZD found support early following a stronger yuan, fixed by the People's Bank of China, that expressed discomfort at the speed and scale of recent yuan weakness. Having crept toward US$0.5950, the NZD then fell sharply through offshore trade, breaking below US$0.59 to mark fresh lows at US$0.5880. With momentum firmly behind the US dollar, the NZD looks set to test 2024 lows of US$0.5850.

Our attentions turn to domestic inflation indicators ahead of US PPI data as the main macro items headlining today’s ticket.

Key Movers

The US dollar upswing continued on Wednesday, despite a correction in front end yields and elevated calls for another Fed rate hike in December. US CPI data for October printed in line with market estimates, ensuring the annual rate of inflation fell from 2.6% to 2.4%. The continued retracement in inflation pressures allowed analyst to firm bets for another rate cut in 2024 and markets are pricing in 21 points of easing into the end of the year, up from 15 prior to the print. Despite rising expectations for another cut, the US dollar maintained its post-election momentum. The USD DXY index reached highs not seen since April and appears poised to mark a new 2024 peak. The yen allowed the USD to trade back through 155 while the euro marked a new 2024 low, sliding toward 1.0550 and the pound tested a break below 1.27.

Our attentions today turn to the latest US PPI report, while CPI input data will help shape expectations for the PCE index, the Fed’s preferred measure of inflation.

Expected Ranges

  • NZD/USD: 0.5820 - 0.5950 ▼
  • NZD/EUR: 0.5500 - 0.5600 ▼
  • GBP/NZD: 2.1400 - 2.1700 ▲
  • NZD/AUD: 0.9000 - 0.9100 ▼
  • NZD/CAD: 0.8180 - 0.8280 ▼

Written by

Matt Richardson

OFXpert

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.