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New Zealand Dollar higher on GDP numbers

NZD - New Zealand Dollar

The New Zealand Dollar opens a shade higher and finds itself up 30-pips from this time yesterday when valued against its US counterpart. Moving off lows of 0.6573 following the news of local upbeat data the NZD/USD was carried through 66c to touch and eventual high of 0.6608. New Zealand GDP printed a 0.7% rise in the September quarter, a stronger than expected rebound after a sharp slowdown in the first half of the year and a 2.3% year-over-year basis. The data has lowered odds for a rate cut by the RBNZ as strong GDP prints are likely to lift inflation expectations and in turn, raise the likelihood of the RBNZ keeping rates steady.

On the data front, there are no scheduled releases locally and only some low tier pieces out of the US and Europe. Adopting a technical viewpoint, the New Zealand Dollar opens this morning at 0.6605. We see initial support at 0.6560 on the downside followed by 0.6520. On the topside, a sustained move above 0.6600 will indicate some buying activity and if there is enough upside momentum then look to a rally towards 0.6630.

Key Movers

Following the post-election rally the Pound has lost pretty much all gains against the Greenback and we find it 3% lower and on a continued downward journey hovering at 1.3013 at the time of writing. The main driver yesterday was on the back of Bank of England and its monetary policy decision, they opted to leave rates on hold but we see two policymakers continuing to push for a lower interest rates. The risk of a 2020 rate cut lingers to the detriment of the GBP exchange rate.

Over in the US Donald Trump has become the third president to be impeached, he has been accused of abusing his power, extorting Ukraine to help Trump’s campaign by fabricating smears about his potential political opponent and withholding US assistance from Ukraine until the campaign help was received. What next, the trial will begin in January whether to convict and remove Trump from office, as prescribed in the constitution.

In other news, the Bank of Japan kept their policy rate steady in line with the ECB and US federal Reserve, siting that they will likely be in a holding pattern for some time. As widely expected, the BOJ maintained its short-term interest rate target at -0.1 per cent and that for 10-year government bond yields around 0 per cent.

Expected Ranges

NZD/USD: 0.6520 - 0.6630 ▲

NZD/AUD: 0.9540 - 0.9650 ▲

GBP/NZD: 1.9420- 1.9820 ▼

NZD/EUR: 0.5880 - 0.5980 ▲

NZD/CAD: 0.8600 - 0.8710 ▲