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New Zealand Dollar falls to 4-week lows under 68c

NZD - New Zealand Dollar

The NZD dropped to a low of 0.6780, a level not witnessed since March 8th on the back of weaker-than-expected Business Confidence data. According to the ANZ business confidence fell to -38 in March with a market expectation of -24.3. Another piece of data which affirms the RBNZ’s shock announcement on Wednesday that their next move could be down. The RBNZ explicitly cited all the easing moves by other central banks as a reason for its turnaround since they had put unwanted upward pressure on the local dollar. Meanwhile the NZ government announced the initial seven members of the central banks new policy setting committee, this essentially transfers power to change rates form the governor alone to a panel of banks staff and external members.

Locally, the RBNZ governor is due to speak about the future of the New Zealand monetary policy framework where markets will be looking out for clues regarding monetary policy. Also on the calendar sees Building Consents/approvals for the month of March.

On the technical side support sits at a Feb 12 low of 0.6720 followed by 0.6700. On the top side resistance can be seen at 0.6830 followed by 0.6890.

Key Movers

The Pound Sterling has tumbled nearly 1.5% lower from 1.3250 down to 1.3040 vs the US Dollar as Brexit votes failed to win majority support keeping the current Brexit deadline in place. The EU have agreed to a delay until May 22nd if the lawmakers back the deal otherwise April 12th will be the deadline. Prime Minister May has said she will step down if her deal gets passed however it’s unlikely to gain enough support as a large number of the Democratic Union Party, which props up May's coalition government, has said it will vote against the Withdrawal Agreement as it included the Irish backstop.

Despite the third and final annual reading for US GDP reporting an annualised increase of 2.2% where economists were expecting a growth rate of 2.4% the Greenback, US equites and US bond yields all moved higher overnight. Meanwhile, US initial Jobless claims fell 5k to 211k in the week ending March 23, the four-week moving average also fell to 217k, the trend in the series suggests the labour market remains healthy. In other news, the Dow Jones closed up 92 points (or 0.4%) and the S&P 500 index finished 10 points higher (or 0.4%).

Expected Ranges

NZD/USD: 0.6650 - 0.6830 ▼

NZD/EUR: 0.5980 - 0.6090 ▼

GBP/NZD: 1.9050 - 1.9500 ▼

NZD/AUD: 0.9500 - 0.9640 ▼

NZD/CAD: 0.9000 - 0.9140 ▼