NZD tracks sideways as markets ignore RBNZ policy update
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Daily Currency Update
There has been little net movement in the NZD through the last 24 hours as markets largely ignored the RBNZ’s policy update. The Reserve Bank of New Zealand yesterday left rates at 3.25%, the first hold since rate cuts began in August last year. The move was largely anticipated yet the market’s first reaction was to push domestic rates and the NZD higher. The NZD pushed through US$0.60 to mark session highs just above US$0.6012 before an assessment of the minutes revealed policy makers had debated cutting rates again and while electing to hold on this occasion expected to lower the cash rate further. The NZD gave up early gains drifting back below US$0.60, finding support at US$0.5980 and tracking sideways through the rest of the day and overnight trade.Our attention today turns to US jobless claims and ongoing tariff headlines.
Key Movers
Price action among major currencies was muted Wednesday as markets sidelined major bets amid an absence of tier 1 macro data and headline news flow. While President Trump released another slew of letters informing trading partners of the tariff rates that will be applied on August 1st the list of recipients did not include significant trading partners and offered little deviation from the rates announced on Liberation Day. All in the market still expect the final US tariff rate will land near the current levels and are therefore largely unperturbed by this latest round of posturing. The USD DXY index is little changed while the CHF and JPY led gains as the euro and GBP edged marginally lower. The days biggest looser was the Brazilian Real as markets responded to reports a 50% tariff would be levied. Previously Brazil had been hit with just a 10% baseline tariff but Trump Grievances surrounding the treatment of former President Bolsonaro and the perceived ‘anti-American’ polices of the BRICS alliance have driven a more aggressive agenda. While the announcement doesn’t necessarily suggest a broader shift in the US tariff agenda it serves as a timely reminder of the Presidents penchant for settling all manner of perceived injustices regardless of their impact on perceived trade fairness.Our attention today turns to US jobless claims in an otherwise light macro ticket with tariff headlines again driving underlying sentiment.
Expected Ranges
- NZD/USD: 0.5950 - 0.6080 ▲
- NZD/EUR: 0.5080 - 0.5150 ▲
- GBP/NZD: 2.2500 - 2.2800 ▼
- NZD/AUD: 0.9150 - 0.9230 ▼
- NZD/CAD: 0.8150 - 0.8250 ▲