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Kiwi breaks through 0.7000 on upbeat sentiment

Friday 30 July, 2021

Daily Currency Update

NZD - New Zealand DollarUpbeat sentiment on Thursday saw the New Zealand dollar rise from 0.6970 to 0.7020. With expectations that the US federal reserve may be slower to tighten monetary policy settings in the US and US economic data surprising to the downside, the USD was broadly lower. This also allowed the Australian dollar to rise from 0.7380 to 0.7412 throughout trade, although the extension of lockdowns in Australia continues to weigh on AUD/NZD, with the cross falling to 1.0545. We saw US Q2 GDP come in at an annualised 6.5% quarter on quarter growth, well below consensus estimates of 8.5%. Also out of the US, jobless claims came in close to expectations and pending home sales fell 1.9% in June with prices at record highs. The day ahead features Australian private credit data and Q2 PPI. We will have NZ consumer confidence data from ANZ, before we turn to Q2 GDP and CPI out of Europe. There’s also a raft of releases due from the US, with the June core PCE deflator the headline risk event. Traders will be looking for NZD/USD to consolidate above 0.7000 before any further upside moves are considered.

Key Movers

The US dollar continues to come under selling pressure since yesterday's FOMC meeting. With the market seemingly coming to the conclusion that the Federal Reserve won’t be announcing any tapering in bond purchases until at least later this year. The USD index is now trading at a one month low and is 0.4% lower, as positive risk sentiment and a fall in US real yields weigh further on the worlds reserve currency.

Expected Ranges

  • NZD/USD: 0.6920 - 0.7050 ▲
  • NZD/EUR: 0.5800 - 0.5910 ▼
  • GBP/NZD: 1.9830 - 2.0100 ▲
  • AUD/NZD: 1.0500 - 1.0600 ▼
  • NZD/CAD: 0.8700 - 0.8770 ▲