Home Daily Commentaries New Zealand Dollar pulls back from monthly highs

New Zealand Dollar pulls back from monthly highs

Daily Currency Update

The New Zealand Dollar closed the week a full cent higher from Mondays open of 0.7025 as demand for risk increased mid-week as the RBNZ also kept rates on hold. Opening at 0.7170, Friday’s action was stagnant, trading in a narrow band between 0.7130 and 0.7175.
The multifarious macroeconomic data out of China saw little movement to currency markets during intraday trade, despite Chinese GDP figures recording an impressive 18.3% growth for the first quarter of 2021. Industrial output was also positive, driven by strong offshore demand, reaching 14.1% in March y/y, along with retail sales up 34.2%.
The NZD/USD cross will take its lead from the latest Global Dairy Trade auction and Inflation figures both due for release on Wednesday. The New Zealand Dollar opens this morning at 0.7130. We expect support levels to hold onto moves approaching 0.7180, while any upward push will likely meet resistance at the 71 US cent handle.

Key Movers

All eyes were on China on Friday as they recorded the highest quarterly year on year growth rate since publishing began in the 90’s. Albeit coming off a low base due to the impact of coronavirus, an impressive number nonetheless, signaling the global economy looks to be showing signs of improvement.
Equity markets continued to be fueled by a strong recovery this year from the pandemic as vaccinations roll out globally. Both the S&P 500 (0.5%) and Dow Jones (0.35%) saw record highs as the bull market remains strong.
The US Dollar Index (DXY) which measures a basket of currencies against the worlds most liquid currency fell 0.14% on Friday, along with a decline of 0.14% against the Euro and 0.37% against the Sterling. The release of consumer sentiment in the United States did no favours for the greenback, despite rising slightly to 86.5 from March’s reading (84.9). It saw its best level in a year as stimulus spending and low interest rates offset current worries over the pandemic.
This week investors focus their attention on central bank interest rate decisions in Europe and Canada. The release of United Kingdom inflation figures is also due for release on Wednesday.

Expected Ranges

  • NZD/USD: 0.7100 - 0.7180 ▼
  • NZD/AUD: 0.9200 - 0.9260 ▼
  • GBP/NZD: 1.9100 - 1.9500 ▲
  • NZD/EUR: 0.5930 - 0.5990 ▼
  • NZD/CAD: 0.8880 - 0.9000 ▼