Home Daily Commentaries NZD steady in face of rising US yields

NZD steady in face of rising US yields

Matt Richardson
Written by
Matt Richardson

Matt Richardson

OFXpert

Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange.

| Thursday 14 March, 2024

Daily Currency Update

The New Zealand dollar held a narrow range through Wednesday, little changed and bouncing between US$0.6145 and US$0.6170. In the absence of any major market moving data investors appeared content in monitoring positions and waiting for that next catalyst that will spark a shift in direction. NZGB yields rallied along with US treasury yields, while equities were relatively stable. With little of note on today’s domestic docket our attentions turn to a busy US docket with PPI and retails sales data headlining. With inflation in focus, we are keenly attuned to any correction in PPI numbers. Easing input costs should alleviate broader PCE and CPI inflation concerns and could help elevate calls for the Fed to move early and cut rates in May weighing on the USD and bolstering the NZD while a surprise uptick all but guarantees markets will need to be patient in pricing in Fed rate adjustments, propping up near term USD expectations.

Key Movers

Price action across currency markets was largely subdued through Wednesday with Norwegian Kroner leading gains among major currencies amid an uptick in Oil prices following a Ukrainian Drone Strike on Russian Oil refineries. The US DXY index edged lower on the day while the GBO And Euro offered little to excite investors. Reports that the Bank of Japan may tweak its policy framework at next weeks policy meeting, dominated investors attentions. Confirmation a string of Japanese unions had secured a 5.3% uptick in average wages removed fears a tighter financial conditions will further suppress activity, bolstering calls for policy makers to begin the process of exiting negative interest rates and yield curve controls. The USD edged lower, unable to hold onto gains above 148.

Our attentions turn now to US PPI and retails sales data ahead of manufacturing and consumer sentiment numbers Friday.

Expected Ranges

  • NZD/USD: 0.6100 - 0.6200 ▲
  • NZD/EUR: 0.5580 - 0.5650 ▼
  • GBP/NZD: 2.0650 - 20850 ▼
  • NZD/AUD: 0.9250 - 0.9350 ▼
  • NZD/CAD: 0.8250 - 0.8350 ▼

Written by

Matt Richardson

OFXpert

As a Senior Corporate Client Manager, Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange. Matt has clients who he has been working with for over a decade, a testament to his knowledge and dedication in the field. Matt is also a regular contributor on Ausbiz, offering clear and precise updates on currency market trends, showcasing his ability to interpret complex financial data into actionable insights.