Daily Currency Update

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Risk on sends NZD higher

NZD - New Zealand Dollar

The NZD was the best performer on the day on Friday, rising from 0.6600 to 0.6673 throughout trade. The AUD also performed well, breaking through the 0.7200 handle to touch intraday highs of 0.7243 however the NZD strength saw the AUD/NZD cross under pressure, falling from 1.0875 to 1.0850.

The NZD was bolstered by positive risk sentiment as markets warmed to the idea of a Biden election win. With the US election expected to be a key driver of markets, and the NZD over the coming months, the prospect of a clear Biden win, and therefore no contested result, has been welcomed by markets. News of Trump’s support of an expansive COVID-19 support package also aided sentiment.

Monday is shaping up to be a quiet day as the US celebrates Columbus Day. The New Zealand net migration release is not expected to move markets. With the borders remaining closed, the read is expected to remain depressed and will not be considered very meaningful to markets.

NZD/USD traders will be now be eyeing off 0.6700 moving into this week. If risk sentiment deteriorates, we see downside supports around the 0.6600 handle initially.

Key Movers

As we touched on above, markets remain in risk on mode following trump’s support of the COVID-19 support plan and reduced likelihood of a contested election result in the US. The safe haven USD has been pushed 0.6% lower, the EUR/USD has risen to levels above 1.1800 again and USD/JPY has fallen slightly to the mid 105’s.

In commodities, oil futures were down over 1% on the day whilst copper and gold both rose 1.3% and 1.9% respectively. The S&P500 also closed up nearly 1% to deliver its highest close in a month.

Expected Ranges

NZD/USD: 0.6570 - 0.6700 ▲

NZD/EUR: 0.5570 - 0.5670 ▲

GBP/NZD: 1.9430 – 1.9684 ▼

AUD/NZD: 1.0800 - 1.0900 ▼

NZD/CAD: 0.8670 - 0.8780 ▲