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NZD steady as markets pause for breath

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.

| Friday 7 March, 2025

Daily Currency Update

The New Zealand dollar tracked a narrow range through trade on Thursday as analysts sidelined major bets amid choppy trading conditions. While the USD was weaker, the NZD found support and edged marginally higher marking intraday highs at US$0.5753, before bouncing between US$0.5720 and US$0.5750 and opens this morning smack bang in the middle of the range at US$0.5734. In other news, the NZD found some support against the euro, edging back above 0.5300, while pushing through 0.4450 against the GBP.

Our attentions remain with US trade announcements, while US non-farm payroll dominate the macro ticket. With concern for US growth prospects rising, we are keenly attuned to labour market performance. A softening in conditions may force the Fed to resume lowering interest rates, focusing on its unemployment mandate at the cost of inflation.

Key Movers

Price action was well contained on Thursday when marked back to the volatility enjoyed through the earlier part of this week. The USD is marginally lower with the DXY index giving up 0.1%. The safe haven Swiss franc and Japanese yen outperformed other majors as risk sentiment faltered amid falling equity prices and ongoing trade and geopolitical policy uncertainty. President Trump confirmed a pause on tariffs imposed on goods from Mexico and Canada that comply with USMCA (United States-Mexico-Canada Agreement). The execution of trade policy today has fostered hopes an all out trade war may be avoided and we continue to watch headlines for guidance into the April 2 reciprocal tariff review.

In other news, the ECB lowered its policy rate by 25 basis points. This is the sixth rate cut since June 2024 and reduces the underlying deposit rate to 2.5%. The move was anticipated and ECB president Christine Lagarde offered little by way of new insights into policy makers plans. She noted policy is becomingly meaningfully less restrictive. Markets are pricing two further rate cuts through year end. The cut had little impact on the euro and it continues to trade near 1.08.

Our attentions remain with US trade announcements, while US non-farm payroll dominate the macro ticket.

Expected Ranges

  • NZD/USD: 0.5680 - 0.5800 ▲
  • NZD/EUR: 0.5280 - 0.5350 ▲
  • GBP/NZD: 2.2400 - 2.2600 ▼
  • NZD/AUD: 0.8980 - 0.9080 ▲
  • NZD/CAD: 0.8080 - 0.8250 ▼

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.