Home Daily Commentaries New Zealand dollar trades below US$0.63

New Zealand dollar trades below US$0.63

Friday 23 December, 2022

Daily Currency Update

The Kiwi dollar is weaker this morning when valued against the Greenback, trading at 0.6248 at the time of writing. The NZD/USD pair attracts some buying on Thursday and reverses a part of the previous day's slide to the 0.6275 area, or a fresh monthly low. A combination of factors are weighing heavily on the Greenback which is acting as a tailwind for the NZD/USD pair. The recent recovery in the global risk sentiment, as depicted by a generally positive tone around the equity markets, continues to undermine the safe-haven buck and benefits the risk-sensitive Kiwi dollar. The greenback is further pressured by the ongoing pullback in the US Treasury bond yields. Earlier this week data from the Reserve Bank of New Zealand showed New Zealand's credit card spending declined for the first time in nine months in November. Total credit card spending dropped a seasonally adjusted 2.6% monthly in November, after a 1.0% growth in October. Spending dropped for the first time since February. Domestic bills fell 2.9% monthly in November to NZ$4.179 billion and overseas billing increased to NZ$509 million, data showed. On a yearly basis, total billing increased 16.0% in November, after a 24.6% gain in the prior month. The pace of growth was the slowest in four months. Looking ahead today and there are no scheduled releases. This is the last OFX daily commentary update for 2022. We will return on January 9, 2023. We thank you for your readership over the last 12 months and wish you a very happy and safe holiday season.

Key Movers

The US dollar recovered its shine on Thursday, and despite still trading within familiar levels against most of its major rivals, it currently stands near weekly highs. The Greenback was boosted by an upbeat US Gross Domestic Product report. US economic growth in the third quarter was firmer than previously estimated, reflecting upward revisions to consumer spending and business investment. Inflation-adjusted gross domestic product, or the total value of all goods and services produced in the economy, increased at a 3.2% annualised rate during the period. That compares with a previously reported 2.9% advance. Personal consumption was revised significantly higher, advancing 2.3% in the latest report compared to 1.7% in an earlier estimate and reflecting stronger services spending. UK gross domestic product (GDP) is estimated to have fallen by 0.3% in Quarter 3 (July to Sept) 2022, downwardly revised from a first estimate fall of 0.2%. In output terms, the services sector grew by 0.1% while the production sector fell by 2.5% in Quarter 3 2022 (including falls in all 13 manufacturing sub-sectors) as well as a fall in the construction sector of 0.2%. The level of real GDP in Quarter 3 2022 is now estimated to be 0.8% below where it was pre-coronavirus at Quarter 4 (Oct to Dec) 2019, downwardly revised from the previous estimate of 0.4% below.

Expected Ranges

  • NZD/USD: 0.6150 - 0.6350 ▼
  • NZD/EUR: 0.5800 - 0.6000 ▼
  • GBP/NZD: 1.9150 - 1.9350 ▲
  • NZD/AUD: 1.0550 - 1.0750 ▼
  • NZD/CAD: 0.8450 - 0.8650 ▲