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New Zealand Dollar rebounds from five-year lows

NZD - New Zealand Dollar

The New Zealand Dollar rebounded from five-year lows on Tuesday as the commodity linked currency continued to struggle in the face of mixed signals in lingering trade wars between the United States and China. Opening Wednesday morning at 0.6325 against the greenback, the Kiwi pushed 0.5% higher for the day as demand for risk appetite improved and demand for the US Dollar weakened following a disappointing ISM Manufacturing release.

NZD/USD rallied 15 points higher following a positive release for ANZ Commodity prices for the month of August, showing a 0.3% lift, rebounding from two consecutive months of weaker prices. The Catalyst for gains were aided by a lift in forestry and dairy sectors. Eventual highs overnight were seen at 0.6364.
With little on the agenda today domestically, global markets will turn its attention to ADP Non-Farm Employment change figures due for release this evening.

From a technical perspective, the NZD/USD pair is currently trading at 0.6360. We continue to expect support to hold on moves approaching 0.6320 while now any upward push will likely meet resistance around 64 US cents.

Key Movers

It has been quite the evening for the British Pound overnight as the GBP/USD pair dipped below 1.2000 for the first time in nearly three years. The opening of UK Parliament this week has media outlets in overdrive as members of parliament voted for a new law to force Prime Minister Boris Johnson and government to delay a no-deal exit from the EU.

The motion was pass by 327 to 299 as Prime Minister put forth another motion for a snap general election on October 15th which was also rejected. The outcome for the Sterling was positive as it rallied sharply to an overnight high of 1.2250.

The US Dollar remained under selling pressure with the US Dollar Index falling from 2019 highs of 99.37 to 98.40 overnight as a poor ISM manufacturing did no favours for the world’s largest traded currency. Early this morning the United States beige book was released to market suggested the economy was expanding at a modest pace to the end of August. A number of key indicators are due for release this evening including ISM Non-Manufacturing PMI data and Unemployment claims.

Expected Ranges

NZD/USD: 0.6300 - 0.6400 ▲

NZD/AUD: 0.9300 - 0.9400 ▼

GBP/NZD: 1.9000 - 1.9400 ▲

NZD/EUR: 0.5730 - 0.5800 ▼

NZD/CAD: 0.8380 - 0.8460 ▼