Home Daily Commentaries New Zealand dollar trades above 57 US cents

New Zealand dollar trades above 57 US cents

Monday 24 October, 2022

Daily Currency Update

The New Zealand dollar is stronger this morning when valued against the greenback. The New Zealand dollar bounced up strongly at US$0.5610 on Friday’s early US session to hit fresh two-week highs at US$0.5765, favoured by a broad-based US dollar weakness. A news report by the Wall Street Journal published earlier on Friday has suggested that Fed officials would be open to debating the size of future hikes, pointing out to a step back on the tightening cycle in December has hammered the US dollar. The NZD / USD is currently trading at US$0.5752 at the time of writing. On the data front last week we saw the release of New Zealand Trade Balance and Credit Card Spending. The trade balance is the value of exported goods minus the value of imported goods. The release showed the goods exports and imports for the September 2022 month compared with the September 2021 month. This is the difference between exports valued at $6 billion (up $1.6 billion or 37 percent) and imports valued at $7.6 billion (up $1.1 billion or 16 percent) which resulted in a trade balance deficit of $1.6 billion. Credit card key points for September 2022 seasonally adjusted total billings in New Zealand were $4.5 billion in September, a rise of 0.7 percent from August and the highest seasonally adjusted value on record. There are no scheduled releases today in New Zealand due to a bank holiday.

Key Movers

The British pound failed on its assault to USD$1.1300 earlier on Friday, although the ensuing reversal has found support at USD$1.1220 and the pair picked up again to the USD$1.1250 area. The GBP/USD remains moderately positive on the day and is in track to regain the previous two days' losses. On the data front, UK Retail consumption contracted by 1.4% in September, well above market expectations of a 0.5% decline, and was 6.9% lower than the same month last year, according to data reported by National Statistics released earlier on Friday. US Treasury yields hit the pause button on Friday following suspected Bank of Japan intervention and signals that the Federal Reserve might consider less aggressive inflation-curbing tactics after November. This led to all three major US stocks to surge but more than 2%, notching their biggest Friday-to-Friday percentage gains since June. The two-year yield slumped 12.7 basis points to 4.48% and the 10-year rate slipped less than a basis point to 4.22% after the Wall Street Journal published the fact that certain Federal Reserve officials are becoming uncomfortable with the speed of interest-rate hikes. The Fed has raised its target funds rate by 300 basis points since the policy tightening began this year.

Expected Ranges

  • NZD/USD: 0.5700 - 0.5900 ▲
  • NZD/EUR: 0.5800 - 0.6000 ▲
  • GBP/NZD: 1.9500 - 1.9700 ▼
  • NZD/AUD: 1.0950 - 1.1150 ▼
  • NZD/CAD: 0.7800 - 0.8000 ▲