New Zealand dollar continues to trade above 62 US cents
Friday 24 March, 2023
Daily Currency UpdateThe Kiwi dollar is slightly stronger this morning when valued against the Greenback. The Kiwi dollar saw some volatility earlier yesterday, upon the FOMC meeting, down on Treasury Secretary Janet Yellen's comments, then recovered with global risk appetite and outperformed. A 25 basis point (bp) rate hike by the Fed was widely anticipated, which pushed rates to 4.75-5.00%. Fed chair Jerome Powell tried harder to maintain his hawkish stance citing that rate cuts in 2023 are not into consideration as restrictive monetary policy is highly required to bring down the inflation rate to 2%. The stage of hawkish stance got de-railed after Fed Powell commented “some additional policy firming may be appropriate”, which indicated that the Fed has come closer to pausing the rate-hiking spell. The Kiwi dollar was generally higher on the key crosses, rallying higher against the AUD seeing AUD/NZD back up around 0.9350 and eyeing month-to-date highs around 0.9370. The Kiwi Dollar is struggling to maintain its feet as the street is anticipating a lower growth rate in the kiwi zone after the flood situation. Meanwhile, Reserve Bank of New Zealand (RBNZ) Chief Economist Paul Conway on Thursday said interest rates were clearly contracting and causing a welcome slowdown in demand in the economy, though it was not yet clear that inflation expectations were under control.
Key MoversOvernight The Bank of England (BOE) has shrugged off the anxiety from this week’s bruising bout of banking ructions, opting for another push to douse Britain’s resurgent inflation rate. Following the US Federal Reserve’s lead from a day earlier, the BoE jacked up its benchmark interest rate by 0.25 percentage points to 4.25 per cent, an 11th consecutive increase. The BoE noted that ‘CPI inflation increased unexpectedly in the latest release, but it remains likely to fall sharply over the rest of the year’. BoE Governor Bailey suggested that there were some signs February’s inflation reading was a ‘one off’. Expectations are growing that the Fed, the BoE and ECB will start to slow their tightening of monetary policy, particularly as falling energy prices take some of the heat out of inflation. The markets are pricing in a peak in the benchmark rate of 3.5 per cent in the eurozone and 5 per cent in the US and 4.5 per cent in Britain.
- NZD/USD: 0.6150 - 0.6350 ▲
- NZD/EUR: 0.5650 - 0.5850 ▲
- GBP/NZD: 1.9550 - 1.9750 ▼
- NZD/AUD: 1.0600 - 1.0800 ▲
- NZD/CAD: 0.8450 - 0.8650 ▼