Daily Currency Update

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Kiwi reclaims 0.72 US cents, but marks new 3-month lows against GBP

NZD - New Zealand Dollar

The New Zealand dollar trended higher through trade on Thursday, pushing back through 0.72 US cents. With little domestic data on hand to drive direction, the NZD was at mercy of the broader market narrative and with volatility across currency markets largely subdued, the currency maintained a relatively tight handle against the world's base currency, bouncing between 0.7175 and 0.7220. Having held firm against most counterparts, the NZD did track lower against the pound, slipping toward 0.5150 and marking new 3-month lows.

With little of note on today’s domestic docket, our attentions turn to a host of data points delivered across Europe and the US this evening. While we don’t expect a significant shift in the underlying narrative, a hit to economic performance could dampen risk demand into the weekly close.

Key Movers

Volatility across currency markets remained subdued through trade on Thursday with little headline newsflow or data points to spark a wholesale shift in direction. The US dollar drifted lower against the euro, yen and pound with the latter extending its upward run toward 3-year highs. Sterling remains a target for investors and analysts, marking fresh highs at 1.3985 overnight. While domestic data shows modest signs of improvement, the end of the Brexit saga and an ambitious schedule of vaccination has fostered hopes for a robust H2 recovery.

The US dollar gave up much of Wednesday’s gains following a slew of mixed macroeconomic data sets, led by softer than anticipated unemployment claims. The number of Americans filing for unemployment last week jumped from 848K to 861K, well above the 775K predicted, and a sign America’s labour market still has a long way to go to recover pandemic fostered losses.

Our attentions turn to a raft of manufacturing and services data across Europe and the US for direction. While we expect volatility will remain muted, a divergence in economic performance could spark euro softness leading into the weekly close.

Expected Ranges

NZD/USD: 0.7170 - 0.7250 ▲

NZD/EUR: 0.5920 - 0.6010 ▼

GBP/NZD: 1.8990 - 1.9520 ▲

NZD/AUD: 0.9240 - 0.9330 ▲

NZD/CAD: 0.9090 - 0.9210 ▲