New Zealand Dollar above 0.6700 amid greenback weakness
Friday 6 November, 2020
Daily Currency UpdateThursday’s session saw the New Zealand Dollar rise from 0.6700 to 0.6769 as the greenback fell 0.7% and global equities pushed higher as vote counting continued in the US. The Australian Dollar raced go a 6 week high, with AUD/USD rising from 0.7170 to 0.7276 forcing the AUD/NZD cross about 50 points higher from 1.07 to 1.0750.
Looking to the day ahead, we will get updated growth forecasts from the RBA in the form of the November monetary policy statement. Domestically we will have RBNZ inflation expectations for November which are expected to maintain the trend of low inflation. Offshore, we have industrial production data out of Germany as well as US employment data which is expected to show a slowdown in employment growth and a stabilizing unemployment rate.
The New Zealand Dollar will continue to trade on developments out of the US election with overnight moves paving the way for NZD/USD to test key resistance levels at 0.6800.
Key MoversAs we touched on above, risk currencies continue to benefit as financial markets view the predicted election results in the US favorably. With Biden’s odds of winning now at 86%, equity markets surged overnight as more votes were counted with the USD falling considerably across the board.
Although Trump has tweeted that he is planning a legal challenge, the way the market has reacted means that this threat is not seen as credible by investors. In monetary policy news, the Bank of England elected to maintain their current policy rate at 0.1% however the big surprise came in the form of an expansion of its bond buying program.
- NZD/USD: 0.6690 - 0.6800 ▲
- NZD/EUR: 0.5650 - 0.5800 ▲
- GBP/NZD: 1.9330 - 1.9430 ▼
- AUD/NZD: 1.0700 - 1.0800 ▲
- NZD/CAD: 0.8800 - 0.8900 ▲