NZD - New Zealand Dollar
The New Zealand Dollar hit a fresh four year low against the Greenback but recovered marginally to open this morning at 0.6241. The Kiwi came under immediate pressure yesterday after the QSBO business survey showed a net 30% of firms reported declining profitability, it’s lowest reading since 2010. A net 55% of firms suggested that demand was the most important constraint to output as well, which only reinforced the view that annualized GDP growth will be below the RBNZ’s expectations. Australia’s RBA only added fuel to the fire with the RBA cutting rates and noting that Australia may be in for an “extended period of low interest rates”. The Kiwi fell significantly on the back of the grim QSBO survey and Australia’s sluggish economy to hit as low as 0.6204 before recovering during the American session as the Greenback also succumbed to domestic weakness.
Moving into Wednesday, the Kiwi is set to enjoy a quiet day on the economic calendar locally. Attentions however will shift to the US for direction with ADP non-farm employment set for release as well as crude oil inventories.
The United States Dollar fell sharply overnight as the US ISM Manufacturing Survey came in well below expectations and hit its lowest level since the GFC. The US Dollar Index reflected this change with the DXY having hit a 2 year high earlier in the session, only to unwind and fall 0.3% for the day after the survey was released. With manufacturing making up around 10% of the US economy and falling into contraction territory, attentions will be fixed on non-manufacturing ISM and non-farm payrolls to hopefully show signs of resilience or the fears of a US recession will undoubtedly grow louder.
Safe Haven currencies, the Japanese Yen and Swiss Franc are the top-performing currencies over the past 24 hours with both approximately 0.4% higher after the Greenback wobbled due to the ISM survey. The Euro also was up 0.3% to open at around 1.09.
0.9271 - 0.9341 ▼NZD/CAD:
0.8219 - 0.8281 ▼NZD/EUR:
0.5671 - 0.5743 ▼GBP/NZD:
1.9646 - 1.9738 ▲NZD/USD:
0.6201 - 0.6278 ▼