Daily Currency Update

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Kiwi eyeing a break below 0.70 US cents

NZD - New Zealand Dollar

The New Zealand dollar closed marginally lower on Tuesday in what was a mixed post Easter trading session across commodity led currencies. With little headline data on hand to drive direction, variable flows across majors forced the NZD toward intraday lows at 0.7010 before technical supports drove a shift back above 0.7050 and highs at 0.7060. Dairy prices improved, recovering part of the 3.8% dip suffered mid last month. The 0.3% uptick in the GDT dairy price index suggests prices may be consolidating in line with broader changes in demand.

With little of note on today’s macroeconomic docket, today promises to be another quiet session with risk appetite governing direction. We anticipate confidence should remain well-supported following reports the Trans Tasman travel bubble will open on April 19. The unlocking of quarantine free travel will provide welcome relief to the embattled travel industry. Tourism has long been a vital cog within the NZ economic engine and the return of Australian travellers should bolster confidence and activity through Q2 and beyond.

Key Movers

Price action across major currencies was mixed through trade on Tuesday and investors looked to adjust positions after the Easter long weekend. The dollar index edged marginally lower as the euro climbed through 1.18 and 1.1850 while the Great British pound gave up 1.39 to touch intraday lows at 1.3801. With little headline data on hand and no real change in the pandemic narrative there appears little catalyst for the contrasting flows, and we can only surmise that standard variations are responsible.

With little of note on today’s ticket we expect another quiet day ahead. British Prime Minster Boris Johnson affirmed the governments' commitment to releasing restrictions and open up the economy with retail shopping and outdoor dining soon to be resumed. As the UK continues to enjoy a sharp decline in COVID-19 case numbers and pushes its aggressive immunisation schedule, we expect sterling will remain well-supported through the short term with resistance on moves approaching 1.40 intact for now.

Expected Ranges

NZD/USD: 0.6990 - 0.7120 ▼

NZD/EUR: 0.5880 - 0.5980 ▼

GBP/NZD: 1.9480 - 1.9820 ▼

NZD/AUD: 0.9180 - 0.9250 ▼

NZD/CAD: 0.8790 - 0.8920 ▲