Home Daily Commentaries Kiwi maintains levels above 65 US cents

Kiwi maintains levels above 65 US cents

Daily Currency Update

NZD - New Zealand DollarThe New Zealand dollar pulled higher overnight as the greenback was sold off in droves following a dovish Federal Reserve outlook. Opening Wednesday morning at 0.6528, the Kiwi was unfazed by a poor dairy price index drop of 3.8%, the third consecutive drop for the GDT price index.A stronger than expected current account figure for the year to March saw the NZD/USD reach an intraday high of 0.6539. The current account deficit narrowed from 3.8% to 3.6% of GDP. The main movements were post the FOMC statement, as the NZD reached an overnight high of 0.6562. Further direction for the local currency will be dependent on this mornings GDP figure where market expectations see a reading of 0.6% for Q1.From a technical perspective, the Kiwi is currently trading at 0.6538. We continue to expect support to hold on moves approaching 65 US cents while any upward push will likely meet resistance at 0.6580.

Key Movers

US Dollar momentum stalled overnight despite the Federal Reserve deciding to hold rates in June’s monetary policy meeting at 2.25-2.5%. The FOMC has indicated that it is ready to cut rates in the future if necessary as signs of a slowing economy continues. The US Dollar Index (DXY) declined 0.43% for the day coming off highs of 97.77 to open this morning at 97.22. Market expectations based on the CME FedWatch tool have now moved to a 70% chance of a rate cut in on July 31st at next months meeting.One of the best performers overnight was the Great British Pound as inflation came in at expectations of 2% for the month of May. Cable rallied from 1.2550 to overnight highs of 1.2650, seeing relief short term relief as political uncertainty continues to drag the Pound lower.Central banks globally continue to be a major focus this week as both the BOJ and Bank of England meet on Thursday to announce their policy decisions. There are no expectations of any surprise moves as both central banks are expected to keep rates on hold at current levels.

Expected Ranges

  • NZD/USD: 0.6500 - 0.6580 ▲
  • NZD/AUD: 0.9450 - 0.9550 ▼
  • GBP/NZD: 1.9200 - 1.9600 ▲
  • NZD/EUR: 0.5780 - 0.5850 ▼
  • NZD/CAD: 0.8620 - 0.8750 ▼