New Zealand dollar continues to trade around US$0.60
Daily Currency Update
The New Zealand dollar is slightly stronger this morning when valued against the Greenback, currently trading at US$0.5998 at the time of writing. The Kiwi dollar posted modest yesterday, however, continues to trade below the US$0.60 barrier. The weakening of the Greenback backs the modest uptick of the pair.On the data front, the International Monetary Fund (IMF) stated in the report that the Reserve Bank of New Zealand will have scope to start cutting interest rates later this year as inflation returns to its target band. IMF added that inflation in New Zealand is projected to return to its central bank’s 1-3% target in the third quarter of this year.
Looking ahead to the rest of this week, the only scheduled release will be the ANZ Business Confidence on Thursday. A survey of about 1,500-2,000 businesses asks respondents to rate the relative 12-month economic outlook. This is seen as a leading indicator of economic health as businesses react quickly to market conditions and changes in their sentiment can be an early signal of future economic activity such as spending, hiring and investment.
Key Movers
Overnight the Pound sterling had a mild recovery against the Greenback in the mid-North American session, as the Greenback remains offered amid speculations the Federal Reserve (Fed) would cut rates in June. At its March meeting last week, the Fed held the benchmark rate to the 5.25%-5.5% range.After that meeting, Fed Chairman Jerome Powell emphasized that policymakers are likely to cut interest rates later this year. Still, only once they have greater confidence that inflation is moving toward its 2% target. At the time of writing, the GBP/USD trades at 1.2635. gains 0.32%.
On the data front, US housing data was weaker than expected as New Home Sales slumped 0.3%, with sales coming at 0.662 million, below estimates of 0.675 million and January’s 0.664 million. Elsewhere, the Chicago Fed announced the National Activity Index saw improvement, moving from -0.54 to 0.05, with positive developments across all four index categories. The tiny decline registered was likely owed to an uptick in mortgage rates during the month.
According to Freddie Mac, the average 30-year mortgage rate rose to 6.8% in February from 6.6% the month prior. Moving forward, a structural shortfall of available single-family homes as well as home builders' ability to bridge the affordability gap with price incentives should continue as tailwinds and support an improving sales pace this year.
Expected Ranges
- NZD/USD: 0.5900 - 0.6100 ▲
- NZD/EUR: 0.5440 - 0.5640 ▼
- GBP/NZD: 2.0940 - 2.1140 ▲
- NZD/AUD: 1.0800 - 1.1000 ▼
- NZD/CAD: 0.8050 - 0.8250 ▲