Daily Currency Update

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Kiwi drops on broader greenback strength

NZD - New Zealand Dollar

The New Zealand dollar was once again dragged lower on Wednesday following a poor inflation print in Australia across the Tasman. Opening the morning at 0.6650, the Kiwi quickly resumed its downtrend to an intraday low of 0.6615. With thin liquidity in the markets due to Easter and Anzac Day holidays, there was no relief yesterday as the NZD/USD slid to further lows of 0.6583.

Looking ahead today we see the release of domestic Trade Balance figures for the month of March which is expected to come in at + $131m. The New Zealand Dollar opens this morning at 0.6630. We continue to expect support to hold on moves approaching 0.6580 while now any upward push will likely meet resistance at 0.6680.

Key Movers

The greenback continued its broader rally as the DXY broke through key resistance levels of 97.60. Core Durable Orders for the month of March powered ahead as equipment purchases rose by its largest levels in eight months. This fuelled the US Dollar Index to reach two-year highs overnight of 98.30, and powering though 98.00 for the first time since May 2017.

The Euro was a key mover lower over the past week seeing 22-month lows of 1.1120 overnight. A stronger greenback and a string of poor data streaming out of the region could see the possibility of the 1.10 handle to be tested over the coming weeks. IFO Business Climate figures released in Germany showed a decline in business morale as the regions largest economy continues to fade.

Both the BOJ and Bank of Canada kept interest rates on hold yesterday. Bank of Canada maintained its interest rate at 1.75% with a downgrade in growth forecasts noted. Growth is expected to peak at 1.2% this year with real GDP to steadily climb to 2% in 2020 and 2021. BOJ kept rates on hold at -0.1% with a commitment to its ultra-loose possibility for at least another year as BOJ Governor Haruhiko Kuroda noted global trade tensions continue to affect the local economy.

Market moves expect to be driven this evening by the release of Advance GDP figures in the United States for the first quarter of 2019.

Expected Ranges

NZD/USD: 0.6580 - 0.6700 ▼

NZD/EUR: 0.5900 - 0.6000 ▲

NZD/AUD: 0.9400 - 0.9500 ▲

GBP/NZD: 1.9280 - 1.9650 ▼

NZD/CAD: 0.8880 - 0.9000 ▲