Daily Currency Update

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Kiwi lacks strength pulling back from three-month highs

NZD - New Zealand Dollar

The New Zealand dollar opened in positive fashion to start the week and saw three-month highs of 0.6465 as risk appetite improved due to positive trade talks between the United States and China. With a lack of domestic data and any fundamentals to hold the Kiwi higher, the greenback was back in force overnight pulling the NZD/USD back towards the 64 US cent handle.

This morning Reserve Bank of New Zealand Governor Orr was due to speak this morning at the Insurance Council of NZ Conference. Little movement is expected for the domestic currency as market participants don’t expect any monetary policy discussions ahead of this months RBNZ rate decision on November 13th.

ANZ Commodity Prices are due for release this morning as the New Zealand dollar opens this morning at 0.6397. We expect support levels to hold on moves approaching 0.6370, while any upward push will likely meet resistance at 0.6460.

Key Movers

Trade talks between the United States and China came back in force overnight as a deal continues to be dangled in front of global markets on optimism that an agreement could be signed by the end of November. Furthermore, a trade breakthrough in Asia-Pacific between 16 countries in the Regional Comprehensive Economic Partnership (RCEP) looks to be close to sign off by 2020 after seven years in the making despite India pulling out.

The US Dollar Index (DXY) which measures a basket of currencies against the greenback rose 0.43% to 97.54 on the day as higher US yields on both 10-year treasury notes and 30-year bonds support the worlds most traded currency.

The EUR/USD shifted lower overnight ahead of incoming ECB President Lagarde’s first speech this morning. The pair slipped from 1.1173 to lows this morning of 1.1127 as markets positioned themselves for hints of a change monetary policy from her predecessor Mario Draghi. Lagarde though avoided the topic at the award ceremony the President attended and called for “strength, resolve and courage” for the Eurozone.

Expected Ranges

NZD/USD: 0.6370 - 0.6460 ▼

NZD/AUD: 0.9250 - 0.9330 ▼

GBP/NZD: 2.0000 - 2.0400 ▲

NZD/EUR: 0.5720 - 0.5800 ▼

NZD/CAD: 0.8380 - 0.8480 ▼