Daily Currency Update

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New Zealand Dollar opens the week steady above 64 US cents

NZD - New Zealand Dollar

The New Zealand dollar finished the week 20 points higher after opening the week with uncertainty as global risks continually hamper the local currency. The NZD/USD reached a weekly high of 0.6487 and its highest level since February 6th following a more hawkish monetary policy statement from Governor Orr on Wednesday, noting the need for monetary stimulus in the future was removed.

With economists now forecasting no changes to its official cash rate in 2020 following the decision to keep interest rates at benchmark lows of 1%, the Kiwi closed the week slightly higher at 0.6430 following the release of stable United States retail numbers for the month of January.

The New Zealand dollar opens this morning at 0.6440. We expect support levels to hold on moves approaching the 64-cent handle, while any upward push will likely meet resistance at 0.6480.

Key Movers

The US Dollar continued its march higher in line with equities for 2020 as the US Dollar Index (DXY) reached its highest level since October on Friday evening at 99.17. With the attraction of safe haven flights in play and upbeat local data highlighted by bullish consumer sentiment on Friday, the world largest traded currency could test 2019 highs of 99.67 over the coming week. Consumer spending in the United States rose modestly or the first month of 2020 as retail sales posted numbers of 0.3% in line with expectations.

The single currency in Europe saw further falls last week, hitting two-year lows of 1.0829 against the US Dollar and four-month lows at the Japanese Yen. Continuing to set a bearish tone in the markets, weak economic data and political instability in Germany is likely to weigh on the Euro in the short term.

Global Markets are set to see a drop in liquidity to start the week as the United States observes President day.

Expected Ranges

NZD/USD: 0.6400 - 0.648 ▼

NZD/AUD: 0.9520 - 0.9620 ▼

GBP/NZD: 2.0000 - 2.0420 ▲

NZD/EUR: 0.5900 - 0.5960 ▲

NZD/CAD: 0.8490 - 0.8560 ▼