Daily Currency Update

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Kiwi Nudges Higher Highs

NZD - New Zealand Dollar

The Kiwi Dollar has largely looked through the yo-yo news flow, opening within a few spreads of where we were 24 hours ago with NZDUSD sitting currently at 0.6530. It looks to be consolidating well above the 0.65 handle and set for further moves higher, although not without some small event risk today with the RBNZ’s bank capital announcement. Yesterday’s Australian GDP miss saw the AUD move lower and NZDAUD managed to march on, hitting a four-month high of 0.9552, now sitting at 0.9530.

Key levels of intra-day resistance to watch are 0.6543 (200-Day Moving Average) and 0.6567 (Daily Fibonacci 61.8%). Support sits at 0.6497 (Daily Fibonacci 50%) and 0.6428 (Daily Fibonacci 38.2%).

Looking further ahead, Kiwi data remains subdued until next week. Tonight however, we see the release of Trade Balance, Factory Orders and Initial Jobless Claims data in the U.S.

Key Movers

Trade continues to remain the bottom line for equities, which snapped a 3-day losing streak amid renewed hopes that a deal could be reached by the December 15 deadline. The prevailing media narrative is of constructive negotiations belied by President Trump's recent remarks that a deal could be postponed till next year. The S&P 500 upside was led by Energy and Financials shares, which were among the biggest laggards over the 3-day selloff this week.

Elsewhere, bonds weakened as risk appetites returned. With risk back on, AUD, CAD & NZD in the FX space shined, with safe haven currency’s JPY and CHF retreating.

Finally, the US Dollar Index continued to drift lower after the ISM services composite fell 0.8 points in November to 53.9, reversing some of October's 2.1 point increase. The US Dollar Index managed to break its key 200-Day Moving Average support level for only the 5th time this year. The break of the support level now paves the way for a further drop to its next support level of 97.34 (Daily Fibonacci 50%), currently sitting at 97.60.

Expected Ranges

NZD/USD: 0.6450 - 0.6550 ▲

NZD/EUR: 0.5860 - 0.5950 ▲

GBP/NZD: 1.9950 – 2.0200 ▼

NZD/AUD: 0.9465 - 0.9555 ▼

NZD/CAD: 0.8575 - 0.8690 ▲