New Zealand dollar continues to hold above US$0.59
Written by
Daily Currency Update
The New Zealand dollar is slightly stronger this morning when valued against the Greenback currently trading at 0.5942 at the time of writing. The Kiwi dollar showed positive movement, trading around 0.5960 during the Asian session on Friday. The New Zealand dollar known for its sensitivity to risk sentiment, gained momentum as risk appetite improved, supporting the NZD/USD pair. Last week on the local data front Friday's ANZ-Roy Morgan Consumer Confidence slipped to 82.1 in April, from the previous reading of 86.4. This has marked its lowest level since 2008. Despite this decline, New Zealand's consumer confidence remains relatively elevated. Additionally, Stats NZ reported a trade surplus in March, driven by exports reaching a 10-month high while imports fell to a 2-month low. The decrease in imports reflects a sluggish economy, as both households and businesses grapple with the impact of high interest rates. Looking ahead this week and on Tuesday we will see the release of the ANZ Business Confidence. A survey of about 1,500-2,000 businesses which asks respondents to rate the relative 12-month economic outlook. On Wednesday Statistics New Zealand will release the Unemployment figures for the previous quarter which is expected to rise from 4% to 4.3%. Finally, on Friday we will see the release of the monthly Building Consents.Key Movers
In the United States last week US Gross Domestic Product Annualized (Q1) expanded at a slower pace of 1.6% compared to the previous reading of 3.4%, falling short of market expectations of 2.5%. This slowdown suggests potential headwinds or slowdowns in various sectors of the economy. However, US consumer prices have shown resilience, with the Personal Consumption Expenditures (QoQ) Price Index for Q1 increasing at a 3.7% annual rate. This exceeded both market expectations of 3.4% and the previous reading of 2.0%, indicating prevailing inflationary pressures that could influence Federal Reserve (Fed) monetary policy decisions.The Pound Sterling (GBP) faced selling pressure near 1.2500 against the US dollar on Friday. The GBP/USD pair drops as firm expectations that the Bank of England (BoE) will start reducing interest rates from the June meeting. BoE policymakers see inflation receding sharply in upcoming months but still refrain from providing a concrete time frame for interest-rate cuts. In the press conference after the last monetary policy meeting, BoE Governor Andrew Bailey said market expectations for two or three rate cuts this year are not “unreasonable”. Also, BoE policymakers have remained worried about high service inflation. Currently, the UK annual service inflation is at 6%, higher than what is required to be consistent for bringing down inflation to the 2% target. The GBP/USD pair is currently trading at 1.2494 at the time of writing.
Expected Ranges
- NZD/USD: 0.5800 - 0.6000 ▲
- NZD/EUR: 0.5450 - 0.5650 ▲
- GBP/NZD: 2.0900 - 2.1100 ▼
- NZD/AUD: 1.0900 - 1.1100 ▼
- NZD/CAD: 0.8000 - 0.8200 ▲