Daily Currency Update

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Kiwi range bound as all eyes shift to FOMC

NZD - New Zealand Dollar

The Kiwi dollar bounced on Trade headlines in-line with the Australian dollar, though movement was limited, and it was unable to break into new ranges. Still, after three consecutive days of declines the Kiwi dollar was able to recover from yesterday’s lows around 0.6334 and hit highs of 0.6361 during the US session. The NZDUSD is now sitting at 0.6352 and it has maintained a bid tone on the back of RBNZ Assistant Gov Hawkesby speech yesterday in Sydney being released this morning discussing its 50-basis point cut surprise in August. The Governor described it as a tactical decision to front-load the 25-basis point cuts the market had priced in for August and November. It was initially interpreted by the market as if there was no need to cut again in November. However, implied probability for a 25-basis point cut on November 13th still sits at 80.4%.

Key Movers

Trump stated that he expects to sign China Trade Pact at APEC meeting in Chile next month which takes place Nov. 16-17. This took USDJPY to highs above the 109.00 level for the first time since August. The pair was unable to break the key 200 day moving average level at 109.06, now sitting at 108.95 at the time of writing.
The Brexit headlines continued overnight as the EU agrees to delay Brexit until end-of January. GBPUSD hit highs of 1.2877 in the NY session and it has managed to stay around the 1.2860 level despite news that the UK parliament rejected Prime Minister Boris Johnson third call for early election. GBPUSD is still up 0.3%, compared to 1.2820 prior to the vote, although Johnson is expected to propose a new bill for election on December 12th, reiterating that no-deal Brexit is now off the table.

Expected Ranges

NZD/USD: 0.6315 - 0.6390 ▲

NZD/EUR: 0.5705 - 0.5750 ▲

GBP/NZD: 2.0155 - 2.0312 ▼

NZD/AUD: 0.9265 - 0.9325 ▼

NZD/CAD: 0.8245 - 0.8340 ▲