NZD marks new 2024 low as USD upswing continues
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Daily Currency Update
The New Zealand dollar downturn marked new lows through trade on Thursday amid another uptick in US treasury yields and an extension in the Trump trade. Having given up $US0.59 on Wednesday the NZD extended through US$0.5850 to mark a new post-election low of US$0.5841 overnight, a new 2024 low. There appears little near-term respite for the NZD as concerns over China’s growth outlook and discouraging fiscal stimulus measures weigh on commodities, while fears Trump will ratchet up tariffs against all trading partners are dampening expectations for global growth through 2025.Our attentions turn now to domestic manufacturing PMI numbers, while Japan GDP data and China activity numbers round out the Asian session ahead of US retail sales tonight.
Key Movers
The US dollar extended gains Thursday as US treasury yields edged higher. US yields edged nearer 4.5% touching 4.48% overnight before settling just below 4.45%. Comments from Fed Chair Powell helped drive gains as he noted in an address that the recent performance of the US economy has been “remarkably good”. Stability across the labour market and key consumer metrics gives policy makers license to adopt a careful approach to further interest rate cuts forcing analysts to temper bets for a December rate adjustment. With the USD advancing against all G10 majors the DXY index poked its head above 107, marking a new 12 month high. The JPY and CHF were among the worst performers while the Euro eyed a break below 1.05 and Sterling dipped below 1.2650.We expect momentum to remain with the USD as our attentions turn now to China Activity data, EU and UK economic forecasts and US retail sales.
Expected Ranges
- NZD/USD: 0.5800 - 0.5900 ▼
- NZD/EUR: 0.5500 - 0.5600 ▼
- GBP/NZD: 2.1500 - 2.1800 ▲
- NZD/AUD: 0.9000 - 0.9100 ▼
- NZD/CAD: 0.8180 - 0.8280 ▼