Daily Currency Update

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Kiwi steady as risk appetite improves

NZD - New Zealand Dollar

The New Zealand dollar has opened weaker this morning against the Greenback trading around the 0.6990 level. There are tentative signs of better sentiment for the NZD after last week’s heavy underperformance following the government’s housing policy announcement. Last year, house prices across New Zealand rose by 22%, and have gone up nearly 9% in just the past three months. The Ardern government is tackling the issue through a range of methods including ending its version of negative gearing in which investors were able to deduct the interest they paid on investment properties.

On the data front today its fairly quiet in New Zealand with the only release monthly Building consents a leading gauge of future construction activity because obtaining government approval is among the first steps in constructing a new building. In the year ended February 2021, the actual number of new dwellings consented was 39,725, up 4.9 percent from the February 2020 year. However in February 2021, the seasonally adjusted number of new dwellings consented fell 18 percent, after rising 1.5 percent in January 2021. From a technical perspective, the NZD/USD pair is currently trading at 0.6992. We continue to expect support to hold on moves approaching 0.6972 while now any upward push will likely meet resistance around 0.7015.

Key Movers

News overnight the head of the Centers for Disease Control and Prevention made an impassioned plea to Americans not to let their guard down in the fight against COVID-19, warning of a potential fourth wave of the virus. Cases of the virus are up about 10% over the past week from the previous week, to about 60,000 cases per day, with both hospitalizations and deaths ticking up as well. The highest level since March the 4th. The concern is that new patients tend to be younger.

Overnight in the US we saw the release of US published the March Dallas Fed Manufacturing Business Index, which jumped to 28.9 from 17.2, largely surpassing the expected 12.1. This Tuesday the US will release CB Consumer Confidence foreseen at 96.9 from 91.3 in the previous month.

Expected Ranges

NZD/USD: 0.6940 - 0.7180 ▼

NZD/EUR: 0.5880 - 0.6000 ▲

GBP/NZD: 1.9590 – 1.9800 ▼

AUD/NZD: 1.0850 - 1.0950 ▲

NZD/CAD: 0.8750 - 0.8850 ▲