NZD finds support, consolidating on moves approaching US$0.63
Wednesday 7 December, 2022
Daily Currency UpdateThe New Zealand dollar maintained a relatively narrow trading handle Tuesday in a largely uneventful day. With little of note on the domestic docket and a clear absence of headline, newsflow markets appeared content in carrying forward Monday’s risk-off mood. The NZD bounced between supports at US$0.6305 and intraday highs at US$0.6355. With little of note on today’s ticket, we anticipate price action will remain well contained leading into Friday’s US PPI update ahead of next week’s headline CPI print and Fed policy announcement. US monetary policy remains key in governing NZD direction. With the market still adopting a bad news is good news approach to risk assets, a downside surprise in inflation markers and tempering in the pace of rate adjustments could help catapult the NZD back above US$0.64.
Key MoversPrice Action across majors was well contained Tuesday as commodity currencies softened amid an extension in Monday’s risk of move and a downturn in Oil prices. The AUD and CAD underperformed, while the NZD looked to consolidate support at US$0.63. Amidst a stronger US dollar, the euro gave up a break above €1.05 to trade nearer €1.0450 on open this morning, while the GBP slipped below £1.2150, and the JPY allowed the USD to track back above ¥137. Our attentions turn now to German industrial production data and the Bank of Canada’s latest policy decision. The market is split between a 25- and 50-point hike, and while betting favours a 25-point adjustment, surveys suggest it will be a close call. We anticipate CAD price action leading out of the policy announcement.
- NZD/USD: 0.6280 - 0.6420 ▼
- NZD/EUR: 0.5980 - 0.6080 ▲
- GBP/NZD: 1.9080 - 1.9420 ▼
- NZD/AUD: 0.9380 - 0.9480 ▼
- NZD/CAD: 0.8580 - 0.8680 ▲