Daily Currency Update
NZD - New Zealand DollarThe New Zealand dollar remained largely range bound through trade on Monday, bouncing between supports at 0.6420 and resistance approaching 0.6450. Increased fiscal stimulus from Beijing throughout last week and a decline in the number of deaths caused by the Coronavirus helped the NZD retain recent gains as market fears of a broad based global economic decline eased. With little of note on the domestic docket through the week ahead attentions turn to next weeks retail sales print and ANZ business confidence report as markers of macroeconomic health with direction in the interim driven by risk demand and key Australian, European, UK and US data points. Watch moves in key crosses as the NZD/AUD looks to extend and consolidate above 0.96 while NZD/EUR could extend a break above 0.5950 and make a run on 0.60.
Key Movers
The Great British Pound edged lower through trade on Monday, giving up gains enjoyed in the wake of Boris Johnson’s cabinet re-shuffle and the appointment of Rishi Sunak as finance minister. Prime Minister Johnson has pushed for an uptick in fiscal spending and Sunak is expected to let the tap flow freely in a bid to stimulate domestic economic growth and ease the burden of the Brexit transition. Having touched highs at 1.3070 sterling slipped below 1.30 and opens this morning at 1.2998. With support in play on moves approaching recent lows at 1.2873 and resistance at 1.3070/1.31 attentions turn to CPI and Core CPI inflation data prints Wednesday and composite PMI data Friday as a key markers governing Bank of England Policy direction.The Euro struggled to bounce off recent lows through trade on Monday as persistently lacklustre macroeconomic indicators continued to weigh on investor sentiment. With little data on hand to drive early week direction the combined unit failed to shrug off signs the German economy is beginning to falter as attentions turn to key data sets. German ZEW economic sentiment report Tuesday and key manufacturing and services data Friday govern short term direction and demand for carry trades. Having traded near 3 year lows the currency has lost over 2% throughout February and remains poised to extend the break.
Expected Ranges
- NZD/USD: 0.6390 - 0.6460 ▼
- NZD/EUR: 0.5910 - 0.5960 ▼
- GBP/NZD: 2.0020 - 2.0320 ▼
- NZD/AUD: 0.9530 - 0.9610 ▼
- NZD/CAD: 0.8490 - 0.8550 ▼