Home » Daily Commentaries » Kiwi takes flight as risk sentiment turns further positive

Kiwi takes flight as risk sentiment turns further positive

Monday 18 October, 2021

Daily Currency Update

NZD - New Zealand Dollar

The New Zealand dollar advanced for a third day in a row on Friday, putting it within touching distance of 0.71. Opening this morning at 0.7071, the Kiwi has enjoyed a stellar run of late, registering a near 2.15% gain over the course of last week. The Kiwi found its feet last week on the back of upbeat equity market movements which in turn were spurred on by better-than-expected quarterly earnings and retail sales figures in the US. The positivity in global share markets spread to risk-aligned currencies such as the Kiwi which in turn led to a small sell-off in safe haven currencies such as the greenback and Japanese yen. Adding further support to the Kiwi is reports that the Chinese central bank expects risk of contagion from the Evergrande Groups’ collapse is “controllable”; easing market concerns about a chain reaction affecting the world's second-largest economy. Moving into a new week, the Kiwi is set to initially take direction from our local CPI report before turning offshore to observe China’s GDP figures.

Key Movers

The Great British pound was also the beneficiary of improved risk appetites on Friday, hitting a one-month high against the USD. Opening this morning at 1.3750, the sterling appreciated 0.65% to record its best daily performance for the last few weeks, as well as further extending its October recovery to 2.5% so far. The pound also found support domestically last week as expectations that the Bank of England may hike rates sooner rather than later increase. The Bank of England is now touted as potentially the first of the world’s major central banks to raise interest rates as inflation accelerates at levels twice the bank's price stability target. The Japanese yen found itself on the other side of the spectrum however, falling significantly across the board as funds flowed out of the safe-haven currency. Against the greenback, the yen fell 0.47% on Friday to reach a fresh three-year low and extend a near one-and-a-half month decline.

Expected Ranges

  • NZD/USD: 0.7025 - 0.7110 ▲
  • NZD/EUR: 0.6050 - 0.6130 ▲
  • GBP/NZD: 1.9296 - 1.9529 ▲
  • NZD/AUD: 0.9462 - 0.9577 ▼
  • NZD/CAD: 0.8681 - 0.8786 ▲