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Kiwi dollar weakens in a risk-averse environment

NZD - New Zealand Dollar

The New Zealand dollar is slightly weaker this morning when valued against the greenback down 0.5% to below 0.6350. It was reported yesterday according to a survey compiled by the Bank of International Settlements (BIS) the New Zealand dollar remains the tenth most traded currency globally. The Kiwi has held the number 10 spot since 2010. On the data front there were no key economic releases yesterday in New Zealand. Looking ahead today and this morning we saw the release of the quarterly Westpac Consumer Sentiment survey which resulted in Consumer confidence has fallen to its lowest level since 2012. The Westpac McDermott Miller Consumer Confidence Index fell 0.4 points in September to a level of 103.1. And while that is a relatively small drop, it continues the run of declines that we have seen over the past two years, and leaves confidence among New Zealand households at below average levels

From a technical perspective, the NZD/USD pair is currently trading at 0.6342. We continue to expect support to hold on moves approaching 0.6330 while now any upward push will likely meet resistance around 0.6395.

Key Movers

The week opened with the focus on the oil market after the attacks on Saudi oil production facilities on Saturday. The Greenback rose against a basket of currencies on Monday as U.S. President Donald Trump’s authorisation of the use of an emergency crude stockpile in response to attacks on Saudi Arabian refining facilities cooled a surge in oil prices. Brent crude oil initially shot up 20% soon after the oil futures market opened Monday morning, before settling up only 10% in local afternoon trading. Looking ahead this week and there are four central bank monetary policy announcements on the calendar with the US Federal Reserve's the most important with traders widely expect the Fed will cut interest rates by a quarter of a percentage point this week.

In the UK the Pound Sterling fell below 1.2400 level overnight by renewed demand for the greenback in a risk-averse environment and discouraging Brexit headlines. On the data front yesterday the UK released the September Rightmove House Price Index, which slid 0.2% monthly basis and advanced by a modest 0.2% when compared to a year earlier. There are no macroeconomic events scheduled in the UK this Tuesday. From a technical perspective, the GBP/USD pair is currently trading at 1.2424. We continue to expect support to hold on moves approaching 1.2390 while now any upward push will likely meet resistance around 1.2460.

Expected Ranges

NZD/USD: 0.6250 - 0.6450 ▼

NZD/AUD: 0.9150 - 0.9350 ▼

GBP/NZD: 1.9450 - 1.9650 ▲

NZD/EUR: 0.5650 - 0.5850 ▲

NZD/CAD: 0.8300 - 0.8500 ▼