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New Zealand dollar consolidates just below 0.7

Thursday 18 November, 2021

Daily Currency Update

NZD - New Zealand Dollar

The New Zealand dollar consolidated gains overnight, rising 0.15% to open this morning just shy of 0.7 at 0.6998. There was little action overnight for the New Zealand dollar with markets generally trading sideways with barely any changes in equity markets and only a slight sell-off in US Bond rates. Our neighbours across the ditch however weren’t so boring with the Australian dollar falling 0.47% against the US dollar. The sell-off also saw the New Zealand dollar lift against the Australian dollar to currently trade around the 0.9633 level this morning. Moving into Thursday, the RBNZ is set to release its survey of inflation expectations and the 2-year ahead inflation series in particular is expected to show some sharp increases which may add momentum to the New Zealand dollar.

Key Movers

The Great British pound takes out the key mover spot overnight as their CPI report came in well above expectations and forced the pound up 0.48% to open at 1.3491 against the US dollar. The year-on-year CPI measurement reported a reading of 4.2% against an expected 3.9% which also cemented expectations of a rate hike cycle beginning next month. Furthermore, the market is pricing in over 100BPS of rate hikes into the curve over the next 12 months. On the opposite end of the spectrum however is the Turkish lira, which again finds itself languishing on the brink of a currency crisis. The lira has fallen as much as 3.7% overnight and as much as 28% over the year as the central bank has again cut rates despite rampant inflation. The central bank has cut its key rate 300BPS since September while Inflation has risen to nearly 20%.

Expected Ranges

  • NZD/USD: 0.9572 - 0.9687 ▲
  • NZD/EUR: 0.8771 - 0.8876 ▼
  • GBP/NZD: 0.6142 - 0.6215 ▲
  • NZD/AUD: 1.9163 - 1.9394 ▲
  • NZD/CAD: 0.9652 - 0.7035 ▼