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Kiwi moves south as employment data misses expectations

NZD - New Zealand Dollar

The New Zealand Dollar has primarily traded sideways over the Tuesday session and remains under pressure from its offshore counterparts. With little on the domestic calendar to spur advances, the Kiwi opens this morning at 0.6680 despite some weakness in the Greenback. The Kiwi oscillated to the beat of China with some volatility early in the Tuesday session. Chinese manufacturing and non-manufacturing PMI surprised to the downside which undermined New Zealand dollar valuations. Nevertheless, the Kiwi recovered during the American session after a mixed bag of results from the world’s largest economy. Ultimately however, the New Zealand Dollar mostly continued its trajectory, although nudged up higher ahead of today’s employment data.

Moving into Wednesday, and as of time of writing, New Zealand has just released their employment data which failed to meet expectations. New Zealand’s number of employed people was expected to rise by 0.5% although has actually retraced to -0.2%, a big miss of 0.7%. Labour costs have also come in below analyst expectations while the unemployment rate continues to read 4.2%. The big miss has led to the Kiwi falling 30 pips to read 0.6647 at time of writing. With little else on the economic calendar to drive direction, the Kiwi looks to grapple with the employment news and take cues from off-shore events.

Key Movers

It was an eventful day for the worlds largest economies with China kicking things off during the Asian session. Chinese manufacturing and non-manufacturing PMI surprised to the downside which undermined some emerging market and commodity currencies. Chinese data also did little to allay fears that China won’t be able spur global growth again as China tempers its stimulation package. Nevertheless, China activity remains in relatively good shape but is still tentative at best.

The United States also had a busy day on the economic calendar with a number of releases that ultimately led to a softer Greenback and a flat equity market. It was a mixed bag for the United States with the Chicago PMI coming in very weak but there were some strong pending home sales and consumer confidence data to temper the falls. Adding to the mix was employment cost index data which was released in-line with expectations at 0.7%.

Within this context, the Euro and Sterling are the best performers with some positive Eurozone data pushing the Euro up a modest 0.3% to 1.1213. The Sterling however exceeded even these gains, reaching 1.3029, an increase of 0.8% after news that the Government and Labour Party will try one more time to come to some sort of agreement.

Expected Ranges

NZD/AUD: 0.9401 - 0.9461 ▼

NZD/CAD: 0.8875 - 0.8930 ▼

NZD/EUR: 0.5903 - 0.5951 ▼

NZD/GBP: 0.5008 - 0.5153 ▼

NZD/USD: 0.6576 - 0.6696 ▼