Home Daily Commentaries New Zealand dollar continues to trade below US$0.60  

New Zealand dollar continues to trade below US$0.60  

Daily Currency Update

The New Zealand dollar is weaker this morning when valued against the Greenback, currently trading at US$0.5979 at the time of writing. NZD/USD trims its daily losses during the European hours on Monday. The US dollar receives support due to market caution ahead of the upcoming US presidential election in November. The New Zealand dollar (NZD) faces pressure as the Reserve Bank of New Zealand (RBNZ) is anticipated to implement another 50-basis-point rate cut in its final policy meeting of the year in November.

Markets are even factoring in a potential 75-point cut. On the local front this week all eyes will be on Thursday's ANZ Business Confidence, which is a leading indicator of economic health. Businesses react quickly to market conditions, and changes in their sentiment can be an early signal of future economic activity such as spending, hiring and investment.

On Friday Statistics New Zealand will release the latest monthly building consents. There are no scheduled releases today due to the bank holiday.

Key Movers

The US Dollar Index (DXY), which measures the value of the USD against a basket of six currencies, declined on Monday. This reversed earlier gains amid profit-taking ahead of key economic figures from October to be released later this week. The Dow Jones Industrial Average (DJIA) has recovered from Friday’s 300-point loss, climbing over 0.84% or 350 points, even though US Treasury bond yields continued to rise.

Investors are capitalising ahead of the release of crucial economic data from the United States (US) that will feature the release of Gross Domestic Product (GDP) figures, Nonfarm Payrolls (NFP) and the Federal Reserve’s (Fed) favourite inflation gauge — the Personal Consumption Price Expenditures (PCE) Price Index. Gold traded slightly below its opening price at the beginning of the week and is down by 0.15%, weighed down by rising US Treasury yields.

The XAU/USD trades at $2,742 after hitting a daily high of $2,747. The yield on the US 10-year Treasury note continued to climb, up by three basis points at 4.272%. This has kept Bullion prices from recording a new all-time high above $2,758 as some analysts eye the $2,800 mark toward the end of the year.

Expected Ranges

  • NZD/USD: 0.5900 - 0.6100 ▼
  • NZD/EUR: 0.5400 - 0.5600 ▼
  • GBP/NZD: 2.1600 - 2.1800 ▲
  • NZD/AUD: 1.0900 - 1.1100 ▼
  • NZD/CAD: 0.8200 - 0.8400 ▼

Written by

Brett Ottawa

OFXpert

Brett brings a wealth of experience, boasting more than 15 years in the foreign exchange market. He started his foreign exchange career with OFX more than a decade ago, as a private dealer catering to individual clients. He later transitioned to the corporate sector, assuming the position of Corporate Senior Relationship Manager. What truly excites Brett is the opportunity to engage with people, supporting their business growth and sharing in their successes.