Home Daily Commentaries NZD finds support as bond market volatility eases

NZD finds support as bond market volatility eases

Daily Currency Update

The New Zealand dollar advanced through trade on Wednesday, reversing the week's downward trend climbing back above 0.68 US cents. The sell-off across global bond markets eased, affording equity markets some respite while prompting analysts to amend or moderate recent risk aversion. The broad improvement in risk appetite forced the USD lower and helped the NZD capture new intraday highs at 0.6810 before correcting marginally lower into this morning’s open. Our attentions turn now to next week's domestic CPI print. With some local institutions now pricing in an OCR at 3% before year's end, Q4 inflation data will be critical in managing market expectations and driving NZD direction, particularly against key crosses.

Key Movers

The USD moved lower through trade on Wednesday as aversion to risk abated and investors looked to stabilise the recent correction across commodity currencies and risk assets. The DXY dollar index fell 0.2% yet found support on moves approaching 95.50. Having pared recent gains, the USD remains largely flat on the year as the euro climbed back above 1.1350 and the pound pushed through 1.36. With little of note on today’s ticket, we expect price action will continue to be dominated by ongoing fluctuations in bond market activity and global rates.

Expected Ranges

  • NZD/USD: 0.6730 - 0.6830 ▲
  • NZD/EUR: 0.5950 - 0.6020 ▲
  • GBP/NZD: 1.9980 - 2.0120 ▼
  • NZD/AUD: 0.9380 - 0.9450 ▼
  • NZD/CAD: 0.8450 - 0.8520 ▲