Daily Currency Update

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NZD well and truly stuck below 0.7250

NZD - New Zealand Dollar

The New Zealand dollar was one of the day’s top performers, outpaced only by the AUD as investors continue to reward commodity led and risk proxy currencies. The NZD bounced off lows at 0.72, advancing back toward 0.7250, before trend lines and resistance forced the currency marginally lower into this morning’s open. Since slipping back below 0.725 having touched highs above 0.73, the NZD has struggled to extend gains beyond this handle and with little of note on today’s macroeconomic ticket, we expect it will remain range bound through the end of the week. That said, positive risk sentiment is again building momentum as the USD’s mini resurgence falters and hopes global vaccine rollouts will see the global economy open before years end. In the current environment we remain optimistic the NZD will continue to enjoy upside risks leading through Q2 and into the latter half of the year.

Key Movers

In short there was very little movement across major currencies through trade on Thursday. A lack of high-level macroeconomic data sets and an absence of headline newsflows allowed investors to consolidate recent moves and reassess the underlying market narrative. The euro held onto gains above 1.21 but failed to extend beyond 1.2150, while the Great British pound gave up highs at 1.3855 yet held on above 1.38. Investors appeared content to sit on the sidelines ahead of further US fiscal stimulus advice and next weeks key services and manufacturing PMI’s. With national lockdowns expected to dampen growth prospects, a surprise to the upside could help fuel the risk positive narrative and force the USD back toward 3 year lows.

Expected Ranges

NZD/USD: 0.7080 - 0.7260 ▲

NZD/EUR: 0.5910 - 0.5990 ▲

GBP/NZD: 1.8980 - 1.9220 ▼

NZD/AUD: 0.9305 - 0.9360 ▼

NZD/CAD: 0.9120 - 0.9220 ▲