Daily Currency Update

Get access to our expert daily market analyses and discover how your currency has been tracking with our exchange rate tools

Kiwi steady in face of escalating trade tensions

NZD - New Zealand Dollar

The New Zealand dollar maintained a largely narrow trading band through much of Thursday, edging marginally lower on the day to touch session lows at 0.6617. With little domestic data on hand the NZD took its cues from broader market sentiment and risk trends as resistance on moves approaching 0.6645 forced the unit lower. The diminishing treasury yields and waning global appetite for risk capping upside moves the Kiwi finds itself caught between risk off plays and a correcting US dollar. Shifting expectations surrounding Fed monetary policy has hurt the worlds base currency and allowed the NZD to bounce off 8-month lows and advance 150 points through the last 10 days.

With fair value estimates still nearer 0.67 there is perhaps further upside potential for the NZD but a break above 0.6645/0.6650 needs to materialise. Attentions today turn to US non-farm payroll data as the main marker for direction into the weekend. While a firm print will likely foster little market movement a weaker read could prompt further USD downside and help support the NZD into the weekly close.

Key Movers

The US dollar fell through trade on Thursday as Mexico trade talks soured and calls for a Fed rate hike grew louder. The Dollar was down against the Yen, while the Euro pushed back through 1.13 and the dollar index struggled to bounce off two-month lows. Dollar yields have declined sharply of late as investors aversion to risk, coupled with a heightened likelihood of a Fed rate cut sapped investors demand for the worlds base currency. With Fed monetary policy now crucial to short term direction, attentions now turn to US non-farm payroll data as a marker for broader US strength.

The Euro bounced through 1.13 in the wake of the ECB policy decision as policy makers and president Draghi failed to meet markets Dovish expectations. Despite lower inflation and growth forecasts the ECB pledged to keep rates on hold through the 12 months while an early outline of its LTRO program appear less generous than previous stimulus packages. Having touched 1.1306 the combined unit corrected lower as German treasury yields faltered back to record lows and opens at 1.1276.

Expected Ranges

NZD/USD: 0.6580 - 0.6650 ▼

NZD/EUR: 0.5820 - 0.5920 ▼

GBP/NZD: 1.9020 - 1.9280 ▲

NZD/AUD: 0.9420 - 0.9515 ▼

NZD/CAD: 0.8810 - 0.8910 ▼