New Zealand dollar trades below 62 US cents
Monday 27 February, 2023
Daily Currency UpdateThe Kiwi dollar is weaker this morning when valued against the Greenback. Both the Kiwi and the Aussie dollar fell by over 1% on Friday night. The key 0.62 support for the Kiwi dollar was broken, as was the 200-day moving average of 0.6184, to close the week at 0.6165. The Greenback remains pinned near a multi-week top and continues to draw support from a combination of factors, which is seen exerting downward pressure on the NZD/USD pair. Growing acceptance that the Federal Reserve will stick to its hawkish stance for longer remains supportive of elevated US Treasury bond yields and underpins the buck. Looking ahead next week and on Monday Statistics New Zealand will release quarterly Retail Sales figures with the consensus picking a modest increase of 0.2%, amidst a wide range of minus 1.7% to plus 0.4%. Although this data is extremely late relative to retail data from other countries, it's the primary gauge of consumer spending and tends to create hefty market impacts. On Tuesday we will see the release of the ANZ Business Confidence survey of about 1,500-2,000 businesses which asks respondents to rate the relative 12-month economic outlook. On Wednesday we will see the release of building consents however all eyes will be on Friday when Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr is due to speak about the New Zealand economy at an event hosted by Waikato University, in Hamilton. Volatility is often experienced during his speeches as traders attempt to decipher interest rate clues.
Key MoversIn the US on Friday night real personal spending rose 1.1% m/m, showing unsurprising strength following the boomer of a retail sales report earlier in the month. New home sales jumped over 7% m/m in January to their highest level in nearly a year, one of the few housing market indicators showing any life, and the final reading of consumer sentiment was revised a little higher. These releases encouraged a further re-pricing of US monetary policy expectations, with 82bps of hikes in prices over coming months, suggesting three full 25bps hikes and a chance of a fourth, early in the second half. The Great British Pound is consolidating weekly losses amid a stronger Greenback and higher US yields. US activity and inflation figures above consensus favoured expectations of higher for longer interest rates. As a consequence, the 2-year Treasury yield jumped to the highest since November at 4.79% and the 10-year moved toward 4%. The dollar on Friday accelerated to the upside also boosted by a deterioration in market sentiment. The GBP/USD broke decisively below 1.2000. It is hovering around 1.1940/50, down almost a hundred pips from the level it had a week ago.
- NZD/USD: 0.6050 - 0.6250 ▼
- NZD/EUR: 0.5750 - 0.5950 ▼
- GBP/NZD: 1.9250 - 1.9450 ▲
- NZD/AUD: 1.0750 - 1.0950 ▼
- NZD/CAD: 0.8250 - 0.8450 ▼