NZD outperforms major counterparts to touch a 2-month high
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Daily Currency Update
The New Zealand dollar outperforms majors on Friday amid softer US retail sales data and dwindling tariff fears. While Trump's regime of reciprocity remains in sharp focus the threat of imminent tariffs has faded as officials’ analysis the US’s trade relationships with the intent of issuing country-by-country tariff programs. While talk of a reciprocal tariff system that accounts for VAT and GST tax systems has elevated fears Trump's establishment will quash Global growth markets are for now clinging to the belief the headlines are simply a bid to garner leverage in future trade negotiations and the result will not be nearly as crippling. With the USD on the back foot, the NZD extended above US$0.57, touching its highest level since mid-December just short of US$0.5740.With US markets closed for Presidents Day and little of note on the global macroeconomic agenda our attentions today turn to domestic services PMI data and net migration numbers.
Key Movers
The US dollar fell through trade on Friday, extending the week’s decline following weaker than anticipated US retail sales data. Having tracked lower through the Australasian session as markets sideline major tariff bets following reports Trump's regime of reciprocity will not begin until April. The US Dollar DXY index retreated, accelerating losses after the January US Retails Sales report. The print fell well short of expectations with headline sales down near 1% as cold weather, the California wildfires and rising inflation concerns weigh on consumer sentiment and spending propensity. The softer print prompted an adjustment in implied Fed pricing with 40 points of cuts now priced in, up from 25 points prior to the print. Two- and Ten-year yields fell and ensuring the dollar closed the week 1.2% lower. With the USD on the back foot the Euro traded through 1.05, while the British Pound pushed toward 1.2630 and the Yen pushed the dollar back below 153.With US markets closed in observance of Presidents Day our attentions turn to Q4 GDP numbers from Japan as the loan headline item on the macroeconomic agenda.
Expected Ranges
- NZD/USD: 0.5600 - 0.5800 ▲
- NZD/EUR: 0.5400 - 0.5500 ▼
- GBP/NZD: 2.1800 - 2.2200 ▲
- NZD/AUD: 0.8930 - 0.9030 ▲
- NZD/CAD: 0.8020 - 0.8180 ▲