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Kiwi falls short of 70 US cent mark

Monday 28 March, 2022

Daily Currency Update

The New Zealand dollar could not continue its push towards the 70 US cent level on Friday closing at 0.6959 against the greenback. The NZD/USD opened at 0.6960 and rallied to a high of 0.6987, strengthened by rising commodity prices before closing the week 0.07% in the red. Brent crude was up $1.62 (1.4%) on the day to $120 a barrel following a missile attack on an oil distribution facility in Saudi Arabia as traders assessed the impact on global supplies. The New Zealand dollar saw further pressure against the Australian dollar seeing intraday lows of 0.9251 before closing 0.04% lower at 0.9268. The New Zealand dollar opens this morning at 0.6950. With little domestic data due till the NZ Building Consent monthly print on Wednesday, investors expect to see a quieter day on the domestic front. We expect support levels to hold onto moves approaching 0.6920 while any upward push will likely meet resistance at 70 US cents.

Key Movers

The US Dollar Index (DXY) which measures a basket of currencies against the greenback was higher for the third day in a row. Fuelled by rising inflation, the US Dollar could be set for further advances as markets price in another 50 basis points in interest rate rises by the FOMC due at their next meeting on May 4. The DXY closed at 98.80 (up 0.04%) despite US consumer sentiment hitting a 11-year low as global inflation projections are now expected to peak above 5.0% in 2022. University of Michigan's one-year inflation expectations were revised upwards in the United States to 5.4% on Friday. The greenback retreated from its recent surge against the Japanese yen as profit-takers pushed prices down 0.2% to 1.2208. The pound was also flat closing at 1.3180, dampened by a drop in retail sales in the United Kingdom and consumer confidence levels. Next week is set to be dominated by a plethora of employment data prints due for release in the United States. Geopolitical uncertainty is likely to be a major theme in markets this week as the conflict between Russia and Ukraine enters its fifth week. Equities saw its second straight week of gains despite a jittery end to the week as the first quarter of 2022 comes to a close.

Expected Ranges

  • NZD/USD: 0.6920 - 0.7000 ▲
  • NZD/EUR: 0.6300 - 0.6380 ▲
  • GBP/NZD: 1.8800 - 1.9150 ▼
  • NZD/AUD: 0.9200 - 0.9300 ▼
  • NZD/CAD: 0.8620 - 0.8720 ▼