Daily Currency Update
NZD - New Zealand DollarThe New Zealand Dollar staged a small but important recovery to retake the key psychological level of 0.65 on Tuesday despite the quiet domestic docket. Aided by a small shift in risk sentiment due to the ECB President Draghi's dovish speech, the Kiwi rebounded a healthy 0.5% to open this morning at 0.6528. The change in the Kiwi's fortunes came from an unlikely place late on Tuesday evening with the ECB's Mario Draghi's dovish remarks at Sintra paving the way for a potential rate cut in the Eurozone. Equities and risk assets immediately jumped on the prospect of further cheap liquidity with the Kiwi no exception. Adding to the shift in risk sentiment was President Trump confirming that he will meet President Xi later this month.Turning to Wednesday, the Kiwi is set to enjoy another quiet day on the domestic calendar ahead of domestic GDP figures and the US FOMC release on Thursday. Importantly, the US Federal Reserve is set to announce their interest rate decision as well as accompanying commentary early on Thursday morning with all eyes on the direction the worlds largest economy is looking to take.
Key Movers
Volatility was muted moving into Wednesday but there was certainly some action from the Euro and Japanese Yen. European Central Bank President Mario Draghi kicked things off during the European Tuesday session with a notably dovish statement in Sintra that suggested another cash rate cut may be in the future for the Eurozone. The Euro fell 0.28% against the Greenback on the news but managed to rebound significantly on the news that Trump and Xi will meet. Ultimately, the end result was a volatile ride for very little change from yesterdays’ open.It wasn't all going the way of the Greenback however as it shed 0.28% against the Japanese Yen, a global favourite for the title of safe haven. Risk sentiment, while aided by the ECB, still saw the USD lose ground to the Japanese Yen ahead of the key FOMC releases early on Thursday morning. Risk sentiment remarkably reversed course early this morning however with the rebound again due to news of Trump and Xi’s upcoming meeting to ultimately post very little change.
Expected Ranges
- NZD/AUD: 0.9455 - 0.9539 ▲
- NZD/CAD: 0.8702 - 0.8764 ▼
- NZD/EUR: 0.5802 - 0.5863 ▼
- GBP/NZD: 1.9201 - 1.9258 ▼
- NZD/USD: 0.6501 - 0.6562 ▼