New Zealand dollar holds above 61 US cents
Daily Currency Update
The Kiwi dollar is slightly weaker this morning when valued against the Greenback holding above 61 US cents. The Kiwi dollar erased Thursday’s gains on Friday after US economic data sent traders scrambling to pare dovish bets on the US Federal Reserve as November’s Nonfarm Payrolls exceeded market forecasts. Following the data release, the NZD/USD seesawed on a wide range and dived to its low of the day at 0.6103 before recovering some ground. Nevertheless, the NZD/USD closed the week in the red.On Friday in New Zealand, we saw local Manufacturing Sales for the third quarter (Q3) fell 2.7% from a 2.9% rise in the previous reading. Earlier this week, the nation’s ANZ Commodity Price came in at a 1.3% drop in November from a 2.9% rise in October, while the Terms of Trade Index for the third quarter (Q3) declined 0.6% QoQ versus 0.3% prior. Furthermore, the Reserve Bank of New Zealand's (RBNZ) hawkish stance boosts the New Zealand Dollar (NZD) and acts as a tailwind for the NZD/USD pair. Last week, the RBNZ kept the cash rate at 5.5% but emphasized that inflation remained too high and that additional policy tightening may be needed if price pressures did not ease. Looking ahead this week in New Zealand will feature the Current Account alongside the Gross Domestic Product (GDP) figures for the third quarter. Estimates lie at 0.2%, less than the previous quarter's growth of 0.9%.
Key Movers
In the United States on Friday an increase in US Jobless claims, adding to evidence that the US labor market is loosening and increasing hopes that the Fed might start cutting rates next March. The US Bureau of Labor Statistics data indicated that the November Average Hourly Earnings increased by 0.4% MoM, higher than the 0.3% expected and the previous 0.2%. Moreover, US Nonfarm Payrolls surprisingly jumped to 199K in November from the former 150K, surpassing the forecast of 180K, while the Unemployment rate declined to 3.7% from 3.9%. The week-ahead economic calendar will be packed with high-impact events for the U.S. dollar, but the most important ones that may help define its near-term path will be the November U.S. consumer price index report to be released on Tuesday morning and the Federal Reserve’s monetary policy announcement scheduled for Wednesday afternoon. Over the past month, the Fed’s interest rate outlook has shifted in a dovish direction, with markets pricing in about 100 basis points of easing over the next 12 months. Although recent data, such as last month's employment numbers, have been strong and inconsistent with an economy in urgent need of central bank support, traders have held firm in their belief that aggressive cuts are just around the corner.Expected Ranges
- NZD/USD: 0.6000 - 0.6200 ▼
- NZD/EUR: 0.5550 - 0.5750 ▼
- GBP/NZD: 2.0300 - 2.0500 ▲
- NZD/AUD: 1.0550 - 1.0750 ▲
- NZD/CAD: 0.8200 - 0.8400 ▲