Daily Currency Update

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Kiwi falls after resurgent Greenback takes centre stage

NZD - New Zealand Dollar

The New Zealand dollar is weaker this morning trading below the 0.7000 level as higher US government bond yields and weaker equities put pressure on the Kiwi. The Kiwi dollar yesterday rallied during NZ trading hours, reaching a high of 0.7034, but it has been downhill since ending the session down some 0.2%, now trading around 0.6980. On the data front yesterday NZ building permits plunged 18.2% for the month of February, a larger drop than the 5% decline that we had expected.

Looking ahead today, and we will see the release of ANZ Business Confidence which is a survey of businesses, used to see at a glance how business confidence is stacking up, how export sales are performing, how the labour market is doing, and more. From a technical perspective, the NZD/USD pair is currently trading at 0.6979. We continue to expect support to hold on moves approaching 0.6972 while now any upward push will likely meet resistance around 0.7035.

Key Movers

The US dollar was the big winner overnight, improving 0.4% to 93.28 on the US Dollar Index. The Greenback enjoyed the support of a shift in risk sentiment and the month-end closing of positions which saw it as the big mover in overnight trading. At the centre of the shift to risk aversion was the collapse of Archegos Capital Management which saw ripples across equity markets, although it now appears the contagion is fairly limited. Nevertheless, Credit Suisse and Mitsubishi UFJ both succumbed to significant losses from the collapse. Across the Atlantic, the euro his a fresh four-month low below 1.1715 again on the back of US dollar strength.

Expected Ranges

NZD/AUD: 0.9141 - 0.9233 ▼

NZD/CAD: 0.8748 - 0.8852 ▲

NZD/EUR: 0.5898 - 0.6010 ▲

GBP/NZD: 1.9447 - 1.9736 ▼

NZD/USD: 0.6935 - 0.7184 ▼