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New Zealand Dollar fails at 64c on the back of labour data

NZD - New Zealand Dollar

The New Zealand Dollar like the Australian Dollar moved very little on Wednesday trading within a 30-pip range intraday. Locally, we saw the release of the NZ unemployment rate, in the three months to September unemployment rose from an 11-year low of 3.9 percent to 4.2 percent. The numbers were slightly above expectations of 4.1 percent as the number of jobs created slowing to 6000 for the quarter, while the labour force grew at twice that rate. Markets reacted selling the New Zealand dollar and pulling it down from 0.6391 to 0.6369 vs the Greenback as this keeps a rate cut by the RBNZ a possibility next week of 25 basis points and a possible further 25 basis point at the February meeting. Offshore markets saw the pair touch a low of 0.6360 on the back of better than expected US labor force data and trade optimism.

There are no scheduled releases locally today. Adopting a technical viewpoint, the NZD/USD is currently trading at 0.6366 we see initial NZD/USD support at 0.6340 on the downside followed by 0.6290. On the topside, a sustained move above 0.6462 will indicate some buying activity and if there is enough upside momentum then look to a rally towards 0.6590 (200-day SMA).

Key Movers

Markets have been quite uneventful in the last 24 hours, we saw data out the U.S on Wednesday showed Labor Costs for the third quarter increased 3.6 percent beating market expectations of 2.2 percent. Also, the latest on the US-China trade deal was that they were still working together to potentially sign a “phase one” trade deal as early as this month. The U.S Dollar index has strengthened and currently trades around 97.95.

The UK election campaign has officially began as Boris Johnson visited Buckingham Place to notify the Queen of the parliament’s dissolution ahead of a Conservative Party rally. Financial markets now see opinion polls as the main barometer to watch in terms of gauging Brexit outcomes which means any major swings in polls could impact on Sterling. The latest opinion poll shows Boris Johnson’s Conservatives in a comfortable 11 point lead on 38% ahead of the December 12 general election, labour lagging on 27%, the Brexit party seeing their vote shrink to only 10%, whilst the Liberal Democrats are on 16%. GBP/USD sits at 1.2856 having dropped from a high of 1.2897. The main event for the Pound this week has been the highly anticipated Bank of England meeting today, it is not expected that they will announce a change in policy but there is growing speculation that they will begin to adopt a more neutral stance due to weaker growth.

Expected Ranges

NZD/USD: 0.6290 - 0.6470 ▲

NZD/AUD: 0.9190 - 0.9310 ▼

GBP/NZD: 2.0050 - 2.0250 ▼

NZD/EUR: 0.5710 - 0.5790 ▲

NZD/CAD: 0.8320 - 0.8490 ▲