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New Zealand dollar continues to trade back above US$0.59
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Daily Currency Update
The New Zealand dollar is slightly stronger this morning when valued against the Greenback currently trading at US$0.5924 at the time of writing. The Kiwi dollar found support from an improved risk appetite, bolstering the NZD/USD pair. This positive shift follows reduced geopolitical tensions in the Middle East. However, the upside potential for the NZD/USD pair appears to be capped due to a hawkish sentiment surrounding the Federal Reserve’s interest rate outlook for June. According to the CME FedWatch Tool, the probability of interest rates remaining unchanged in the June meeting has increased to 84.4%, up from the previous week’s 78.7%. Looking ahead all eyes will be on New Zealand’s monthly Trade Balance NZD data for March on Wednesday, followed by ANZ-Roy Morgan Consumer Confidence on Friday. There will be no commentary tomorrow due to the Anzac Day public holiday.Key Movers
The pound bounced back from US$1.2300 in Tuesday’s early session as the S&P Global/CIPS posted stronger-than-expected United Kingdom preliminary Services PMI data for April. Surprisingly, the Services PMI jumped to 54.9 from the prior reading of 53.1. Investors forecasted the Services PMI to drop slightly to 53.0. The preliminary Manufacturing PMI, surprisingly contracted, remains below the 50.0 threshold that separates expansion from contraction after expanding in March. The factory PMI falls sharply to 48.3 from expectations and the prior reading of 50.3. Looking ahead to the rest of this week investors will shift focus to the core Personal Consumption Expenditure Price Index (PCE) data for March, which will be published on Friday. The monthly core PCE Price Index is estimated to grow steadily by 0.3%. Annually, the underlying inflation data is expected to soften to 2.6% from 2.8% in February.The US Dollar Index (DXY) is trading softly at 105.70 tallying daily losses on Tuesday’s session. Investors will be keeping an eye on vital economic reports due this week, including the preliminary figures of Q1’s Gross Domestic Product (GDP) Growth Rate and the Personal Consumption Expenditures (PCE) Price Index from March to gain further insight into the economy’s health. During Tuesday’s session, S&P PMIs came in lower than expected and made the USD face selling pressure. US Treasury bond yields are dwindling with the 2-year yield at 4.93%, the 5-year yield at 4.61%, and the 10-year yield at 4.58%.
Expected Ranges
- NZD/USD: 0.5850 – 0.6050 ▲
- NZD/EUR: 0.5450 – 0.5650 ▲
- GBP/NZD: 2.0850 – 2.1050 ▼
- NZD/AUD: 1.0800 – 1.1000 ▼
- NZD/CAD: 0.8000 – 0.8200 ▲
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