Home Daily Commentaries New Zealand dollar continues to trade above US$0.61

New Zealand dollar continues to trade above US$0.61

Brett Ottawa
Written by
Brett Ottawa

Brett Ottawa

OFXpert

Brett brings a wealth of experience, boasting more than 15 years in the foreign exchange market.

| Monday 27 May, 2024

Daily Currency Update

The New Zealand dollar is slightly weaker this morning when valued against the Greenback currently trading at 0.6107 at the time of writing. NZD/USD received pressure due to the emergence of the risk aversion sentiment after the higher-than-expected Purchasing Managers Index (PMI) data from the United States. On the data front last week in New Zealand, the ANZ Roy Morgan Consumer Confidence rose to 84.9 in May from April’s 82.1, yet it remains relatively low, staying close to values observed during the pandemic response. While this uptick in data may have offered some support for the Kiwi dollar limiting the downside of the NZD/USD pair. A quiet week ahead in New Zealand on the economic calendar. On Wednesday 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 Thursday Statistics New Zealand will release the latest monthly building consents and finally on Friday Treasury New Zealand will release the latest Annual Budget Release. This document outlines the government's budget for the year, including expected spending and income levels, borrowing levels, financial objectives, and planned investments.

Key Movers

Last week US business activity accelerated in early May at the fastest pace in two years, largely reflecting stronger growth at service providers and accompanied by a pickup in inflation. The US S&P Global Composite PMI improved to 54.4 in May's flash estimate, up from 51.3, indicating that business activity in the US private sector continued to grow at a faster pace than in April. Meanwhile, the S&P Global Manufacturing PMI increased to 50.9 from 50.0 over the same period, signaling an expansion in the manufacturing sector. Additionally, the S&P Global Services PMI rose to 54.8 from 51.3. Durable Goods Orders in the US increased by 0.7% in April after March’s figures were revised down steeply to 0.8%. April’s reading exceeded market predictions, which expected a drop of 0.8%. The Federal Reserve remains mindful of premature easing with Fed members implying that the policy rate limitation will continue for a prolonged period. Market probabilities for a rate cut in the upcoming meetings are around 50% in September and 85% in November, with a cut priced in by December. Looking ahead this week and on Wednesday we will see the release of the CB Consumer Confidence. On Thursday the Department of Labor will release the latest Unemployment claims. Finally, on Friday the Bureau of Economic Analysis will release the latest both the Personal Consumption Expenditures (PCE) and Consumer Price Index (CPI) reports.

Expected Ranges

  • NZD/USD: 0.6000 - 0.6200 ▼
  • NZD/EUR: 0.5500 - 0.5700 ▼
  • GBP/NZD: 2.0650 - 2.0850 ▲
  • NZD/AUD: 1.0700 - 1.0900 ▲
  • NZD/CAD: 0.8200 - 0.8400 ▼

Written by

Brett Ottawa

OFXpert

Brett brings a wealth of experience, boasting more than 15 years in the foreign exchange market. He started his foreign exchange career with OFX more than a decade ago, as a private dealer catering to individual clients. He later transitioned to the corporate sector, assuming the position of Corporate Senior Relationship Manager. What truly excites Brett is the opportunity to engage with people, supporting their business growth and sharing in their successes.