New Zealand dollar trading above 69 US cents
Wednesday 23 March, 2022
Daily Currency UpdateThe New Zealand dollar is stronger this morning when valued against the Greenback trading above 0.69 US cents on higher risk appetite. The Kiwi dollar was the best-performing currency overnight trading almost 1% higher against the Greenback reaching 0.6965. NZD/JPY rose 2%, touching a multi-year high of 84 overnight. Other NZD crosses are all higher. From a technical perspective, the NZD/USD pair is currently trading at 0.6958. We continue to expect support to hold on moves approaching 0.6900 while now any upward push will likely meet resistance around 0.6970.
On the data front, yesterday Westpac Consumer Sentiment continued to tumble in recent months. Consumer confidence continues to fall and is now at its lowest level since the 2008 global financial crisis, as rising interest rates and living costs begin to bite, Westpac says. One of the biggest concerns for households had been a rapid rise in the prices of household goods, which had far outpaced wage growth. The survey was conducted from March 1 to 17, with a sample size of 1559. The confidence of people aged 18 to 29 fell below 100 for the first time since the beginning of the pandemic, with “a large drop” of 15.2 points to 91.9. There are no scheduled releases today.
Key MoversKey movements overnight came after the Federal Open Market Committee (FOMC) Chair Powell’s hawkish speech where he outlined the possibility of raising rates in 50bps clips and said that the Federal Reserve should move expeditiously. The market is now predicting back-to-back 50bps hikes at the Federal Open Market Committee’s next two meetings. The market currently prices in about 42bps of hikes at each of the next two meetings, so there's a chance of moving to 50bps. US government bond yields soared to multi-month highs after Fed Chair Jerome Powell took a more aggressive stance on monetary policy tightening. Global bond markets continue to struggle as investors take note of the hawkish pivot by central banks. Traders are no longer comparing the current cycle to that of the great bond sell-off of 1994, but are having to go deeper in history back to the 1970s and 1980s.
Looking ahead tonight, all eyes will be on the annual UK CPI inflation data which is forecast to lift to fresh highs, with the headline rate at 6% and the core rate at 5%.
- NZD/USD: 0.6850 - 0.7050 ▲
- NZD/EUR: 0.6200 - 0.6400 ▲
- GBP/NZD: 1.8950 - 1.9150 ▼
- NZD/AUD: 1.0650 - 1.0850 ▼
- NZD/CAD: 0.8650 - 0.8850 ▲