Daily Currency Update

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Kiwi opens relatively unchanged ahead of key Fed policy update

NZD - New Zealand Dollar

The Kiwi had little to digest domestically yesterday and mainly traded on the Aussie’s fortunes over the course of the day. Initially, the Kiwi fell to a low of 0.6325 as it followed its neighbor across the Tasman lower when Australia’s RBA released a dovish statement. The RBA suggested that they are waiting on an accumulation of evidence before deciding to cut rates again, a statement the market took to mean a lowering of the hurdle to another rate cut. Despite the move lower, the Kiwi did bounce back later in the day when the Greenback softened dramatically. Opening this morning at 0.6357, the Kiwi remains relatively unchanged despite oscillating significantly throughout the day.

Moving into Wednesday, the Kiwi again enjoys a light day on the economic calendar but attentions will be firmly fixed on the United States for direction. Of key interest will be the FOMC statement from Fed Chair Powell and whether the Fed does decide to move forward with the 25BP cut the market expects.

Key Movers

Oil prices reversed course dramatically overnight as Saudi oil production looks to be fully restored by the end of the month. Brent crude is down more than 6% for the day to around 64.5USD per barrel after Reuters reported that the lost Saudi Arabia oil production is close to being 70% restored. With confidence somewhat restored in oil markets, the Greenback shed its post-attack gains to fall 0.4% on the US Dollar Index. The main beneficiaries of the falls were the Euro and Great British Pound which both rose around 0.6% to hit 1.1070 and 1.2510.

Expected Ranges

NZD/AUD: 0.9231 - 0.9299 ▼

NZD/CAD: 0.8376 - 0.8463 ▼

NZD/EUR: 0.5706 - 0.5789 ▼

GBP/NZD: 1.9613 - 1.9691 ▲

NZD/USD: 0.6329 - 0.6398 ▼