Daily Currency Update

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All eyes on CPI

NZD - New Zealand Dollar

The New Zealand dollar enjoyed a largely quiet start to the week, trading within a largely tight trading band and bouncing between session lows at 0.6752 and intraday highs at 0.6781. With little of note on the domestic docket investors appear content in treading water ahead of Wednesday’s quarterly CPI print and key US consumer sales data Thursday. Having found support through the domestic session, extending above critical short term supports at 0.6750, the NZD faded through European and US trade as the USD advanced on haven plays as equities edged lower and Treasuries crept higher.

We anticipate the NZD will trade near or at the current ranges in the lead up to tomorrow’s CPI print. Having turned dovish last month, the RBNZ will be keenly attuned to any softness in price pressures and a weak read could amplify calls for a rate cut. A break below 0.6750 could see the currency gap lower into a new downtrend while a surprise uptick could prompt a move back toward 0.68 and 0.69.

Key Movers

Broader currency markets offered little to excite investors through trade on Monday with moves across G10 currency relatively modest. Sterling bounced between 1.3050 and 1.3110 as investors sit back and await more definitive Brexit guidance, while the Euro held onto Friday’s uptick holding on above 1.13 through much of the day. The Canadian dollar stood out as the days worst performer after the Bank of Canada published survey results that showed business confidence had touched a four-year low, intimating strength across the labour market may begin to wane.

Our attentions now turn to a series of key macroeconomic data events leading into the Easter break with UK GBP headlining tomorrow’s dockets while European Manufacturing and Services PMI and US Retail Sales data dominate Thursdays calendar.

Expected Ranges

NZD/USD: 0.6720 - 0.6830 ▲

NZD/EUR: 0.5950 - 0.6050 ▼

GBP/NZD: 1.9050 - 1.9450 ▲

NZD/AUD: 0.9390 - 0.9570 ▼

NZD/CAD: 0.8960 - 0.9120 ▲