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Kiwi follows equities higher following positive US data

NZD - New Zealand Dollar

The overnight session saw the  rise from 0.6570 to 0.6625 against its US counterpart as US equity markets rose. US equities were bolstered by stronger than expected economic data out of the US, coupled with increased hopes that US lawmakers would soon agree to a long-awaited fiscal stimulus package.

This saw positive sentiment envelop markets, supporting global equities and risky currencies such as the AUD and NZD. The AUD outperformed the NZD, rising from 0.7100 to 0.7174 which saw the AUD/NZD cross rise 50 points to 1.0850.

Looking to the day ahead there is nothing of note out New Zealand. We can expect to a ‘pre budget address’ from Australian Prime Minister Morrison and some second-tier data in the form the AIG PMI and CoreLogic home value index reads for September. Traders will then shift their attention to the Eurozone where the unemployment rate is expected to increase from 7.9% to 8.1% for August. The day will then be rounded out by US initial jobless claims data which is expected to remain elevated.

Key Movers

Market fears of an uncertain election result were confirmed during the first of three presidential debates yesterday. The debate has been widely described as a ‘train wreck’, which saw the two candidates engage in a 90-minute shout-fest. Markets were firmly in ‘risk off’ territory after the debate however things turned around as a stream of positive US data releases filtered through.

As we touched on above, risky currencies benefited most as sentiment shifted, with the AUD and NZD being core beneficiaries. We also saw EUR/USD trade between 1.1687 and 1.1751 whilst the USD/JPY traded in a tight behand between 105.40 and 105.75. In commodity markets, spot iron ore rose 3.8% to touch $123.45 during trade while gold and oil futures fell modestly at 0.4% and 0.5% respectively.

Expected Ranges

NZD/USD: 0.65700 - 0.6670 ▲

NZD/EUR: 0.5600 - 0.5700 ▲

GBP/NZD: 1.9390 – 1.9620 ▲

AUD/NZD: 1.0780 - 1.0850 ▲

NZD/CAD: 0.8770 - 0.8850 ▲