Daily Currency Update
NZD - New Zealand DollarThe New Zealand dollar outperformed through trade on Tuesday, advancing against key major counterparts to touch 13 months highs and close in on 0.68 US cents. Markets largely ignored softer than anticipated dairy prices and building expectations the RBNZ will cut rates below zero in February 2021, instead focusing on positive sentiment flows and ongoing US dollar weakness. The NZD touched intraday highs at 0.6777 before drifting lower into this morning’s open. The US dollar found some support having touched 28-month lows forcing the Kiwi off resistance. Despite the US bear market bounce we expect the current trend will continue with the NZD extending the recent upturn through 0.68 and toward 0.70 through the months ahead. Attentions today remain with broader risk flows, with little domestic data on hand to drive direction
Key Movers
The US Dollar crept higher on the day through Tuesday bouncing off 28-month lows amid a short-term profit taking. The world’s base currency remains under pressure with markets finding little incentive to reverse the recent trend. Despite yesterday bear market bounce we anticipate the dollar will continue its downward trajectory as market grapple with an extended period of ultra-loose monetary policy.The Euro tested 1.20 Tuesday touching intraday highs at 1.2010 before shifting lower on US bear market demand. The Euro remains the primary benefactor of US dollar weakness, continuing its 2-month upturn to touch 28-month highs. Having failed to hold onto gains we expect ongoing resistance on moves approaching the key psychological handle. Attentions today turn to preliminary US non-farm payroll numbers and commentary for Bank of England Governor Andrew Bailey. With Sterling largely flat through the last 24 hours investors will be keenly attuned to any commentary that suggests further monetary policy easing is imminent.
Expected Ranges
- NZD/USD: 0.6680 - 0.6820 ▲
- NZD/EUR: 0.5580 - 0.5720 ▲
- GBP/NZD: 1.9680 - 2.0020 ▼
- NZD/AUD: 0.9070 - 0.9220 ▲
- NZD/CAD: 0.8720 - 0.8880 ▲