Home Daily Commentaries New Zealand dollar trades below 63 US cents

New Zealand dollar trades below 63 US cents

Monday 13 February, 2023

Daily Currency Update

The Kiwi dollar is slightly weaker this morning when valued against the Greenback trading at 0.6288 at the time of writing. On Friday the NZD/USD pair reverses an intraday dip to the 0.6300 level reaching a fresh daily high during the early European session. The NZD/USD pair was up over 0.30% for the day, though remains well below the weekly top touched on Thursday. NZ rates continued to push higher, driven by global forces, with the tone not helped by a couple of rare positive domestic economic surprises – the manufacturing PMI rising above the 50 mark for the first time in four months and electronic card transactions rising 3.3% m/m in January, bouncing back after contractions in November and December. Looking to the week ahead and on Monday we will see the release of the BusinessNZ Services Index which is a survey of purchasing managers that asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. On Tuesday we will see the release of the Food Price Index (FPI). Although food is among the most volatile consumer price components, this indicator garners some attention because New Zealand's major inflation data is released on a quarterly basis. The Reserve Bank of New Zealand will also deliver their quarterly Inflation Expectations a survey of about 100 consumers that asks respondents where they expect prices to be 24 months in the future. On Thursday we will see the release of the monthly Visitor Arrivals.

Key Movers

The key headlines on Friday in the US the University of Michigan (UoM) reported that Consumer Sentiment surpassed predictions of 65 and increased to 66.4, indicating a better financial situation. In addition, the expected inflation rate for the year rose from 3.9% in January’s final reading to 4.2%, while the inflation estimations for a five-year period remained steady at 2.9%. While during the European session, the UK economic docket revealed that GDP for the last three months of 2022 stood at 0% and avoided entering a recession, foresaw by the Bank of England (BoE). On a monthly basis, December’s GDP contracted by -0.5%, reported the Office for National Statistics (ONS). In the meantime, a gloomy scenario in the UK suggests that the British Pound (GBP) would be under pressure as the BoE struggles to tame inflation which reached a 41-year high at 11.1% in October of 2022. The Bank of England’s latest monetary policy meeting revealed a split vote amongst its members. The BoE forward discussions and guidance would be interesting, which could reassure the central bank’s commitment to tackle inflation.

Expected Ranges

  • NZD/USD: 0.6200 - 0.6400 ▼
  • NZD/EUR: 0.5800 - 0.6000 ▼
  • GBP/NZD: 1.8950 - 1.9150 ▲
  • NZD/AUD: 1.0800 - 1.1000 ▼
  • NZD/CAD: 0.8300 - 0.8500 ▲