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New Zealand dollar rebounds off support at 62 US cents

NZD - New Zealand Dollar

The New Zealand dollar paused its downtrend overnight, small gains were seen overnight following US dollar weakness on a soft ADP non-farm print in the United States. Opening at 0.6238, the Kiwi was initially supported on Tuesday evening by a steady GlobalDairyTrade auction with the price index up 0.2%. 50% of supply in the auction was sold to China who is the worlds largest dairy importer and is now importing at its largest rate in six years.

Support levels held at 0.6220 in the backdrop of increasing trade war uncertainty as the US announced that tariffs could be implemented on EU imports worth $7.5bn including aircraft and agricultural products.

The New Zealand dollar momentum spurred higher in the North American session and opens this morning at 0.6270. We expect support levels to hold on moves approaching 0.6220, while any upward push will likely meet resistance at 63 US cents.

Key Movers

Weak economic data and a dive in equity prices saw the US dollar come under pressure overnight. All major equity indexes were lower as fears of a recession linger over domestic markets in the United States. A weaker than expected ADP Non-Farm employment print which measures private sector employment created a dovish tone during the North American Session.

The majority of currencies moved in favour against the US Dollar with the Japanese Yen seeing the largest benefit, trading 0.5% higher. The World Trade Organisation approved tariffs by the United States against the European Union creating further global trade war uncertainties. The U.S is set to impose tariffs on $7.5bn worth of goods set to come into force on October 18th.

All eyes will be on the release on the ISM Non-Manufacturing PMI print due for release in the United States overnight as liquidity in the market thins with China observing a week-long holiday.

Expected Ranges

NZD/USD: 0.6220 - 0.6300 ▲

NZD/AUD: 0.9300 - 0.9400 ▲

GBP/NZD: 1.9400 - 1.9900 ▼

NZD/EUR: 0.5700 - 0.5760 ▲

NZD/CAD: 0.8300 - 0.8400 ▲