Daily Currency Update
Price action through trade on Thursday was largely understated with US markets closed in observance of Thanksgiving celebrations. The NZD did however find some support through the domestic session, buoyed by another aggressive People’s Bank of China CNY fix. Undeterred by the recent USD correct, policy makers set a higher daily rate forcing the USD below 7.12 toward intraday lows at 7.1128. The NZD was dragged back above US$0.6050, marking intraday highs at US$0.6065, before retreating to maintain a narrow overnight range near US$0.6045. Our attentions turn now to domestic retail sales data for Q3. We expect spending habits will have contracted, continuing the trend of the year and signaling the headwinds facing the domestic economy. A significant miss may drag the NZD back toward US$0.60 ahead of key US PMI numbers and a Japanese CPI update. With markets uber sensitive to anything that might disrupt the Fed policy cycle, a print outside expectations could prompt an oversized move particularly as US investors return from holiday.
Key Movers
Net moves across major units were muted Thursday with US markets closed in observance of thanksgiving and other markets sidelining major bets until US trade resume. The great British pound has been the best performer through the last 24 hours, buoyed by a stronger than expected PMI print. Key Service data pushed above the line of contraction, marking a four month high and opening the door to a possible uptick in GDP growth through Q4. Sterling pushed back above 1.25, marking session highs of 1.2530. In contrast the euro tracked sideways and remains near 1.09 after Euro area PMI data continues to show a contraction in activity, while German budget issues create a heightened level of uncertainty. With the USD consolidating a move above 149.50 against the yen, our attentions turn now to Japanese CPI data, a Germany IFO survey, and US PMI’s for direction into the weekly close.
Expected Ranges
- NZD/USD: 0.5990 - 0.6080 ▲
- NZD/EUR: 0.5500 - 0.5600 ▲
- GBP/NZD: 2.0600 - 2.0800 ▲
- NZD/AUD: 0.9180 - 0.9250 ▲
- NZD/CAD: 0.8220 - 0.8320 ▲