Kiwi stumbles ahead of NZ CPI release
Daily Currency Update
The New Zealand Dollar was whittled approximately 0.3% lower overnight, opening this morning at the marginally lower level of 0.6286. As has been the norm for some time, the Kiwi continues to trade on domestic issues and US-China relations which both soured slightly during the Tuesday trading session.Kicking things off closer to home, Australia’s RBA released their meeting minutes which ultimately reiterated the dovish stance of the RBA. Noting that they are 'prepared to ease monetary policy further if needed' and that recent data was on the soft side, the Aussie drifted lower as the chances of further rate cuts grow less nebulous. The Kiwi followed its neighbour lower in the absence of any domestic data. Offshore events also took its toll on the Kiwi with the optics of the US China phase one deal making way for the reality of the agreement. Lingering concerns over how much of a deal was actually agreed have muddied the New Zealand Dollar’s support. Nevertheless, despite the sour tone, the Kiwi did see a slight uptick as positive Brexit news reverberated around global markets and risk sentiment returned to the market.
Moving into Wednesday, the New Zealand Dollar will turn to NZ CPI data for direction, although the expectation is to see another slow down compared to Q2’s result. Otherwise, the market will also keep a close eye on and US retail sales.
Key Movers
Brexit dominated attentions last night as the EU and UK look surprisingly close to a draft withdrawal agreement. Prime Minister Johnson has conceded to the EU’s demands on the Irish Border and agreed in principal that the customs border can be in the Irish Sea and thus will keep Northern Ireland within the EU customs union. While the deal looks close to being agreed there is still some major hurdles before pen gets put to paper although there is considerable momentum from both sides as everyone now wants a resolution one way or another. The Great British Pound leaped more than a cent to touch 1.2780 on the news although remains considerably volatile.For other majors, the Greenback remains relatively flat with safe haven currencies whittled lower as risk sentiment returns to the market.
Expected Ranges
- NZD/AUD: 0.9276 - 0.9356 ▼
- NZD/CAD: 0.8271 - 0.8339 ▼
- NZD/EUR: 0.5659 - 0.5732 ▼
- GBP/NZD: 1.991 - 2.062 ▲
- NZD/USD: 0.6249 - 0.6321 ▼