Kiwi holds onto supports ahead key inflation data dropping Thursday
Tuesday 21 January, 2020
Daily Currency UpdateNZD - New Zealand DollarThe New Zealand dollar failed to break outside recent ranges edging marginally lower on the day. With little of note on the domestic docket the NZD was forced toward supports as USD momentum continue into the new week. Having touched 0.6594 the NZD jumped back through 0.66 closing marginally higher at 0.6611.Attentions turn now to Tuesday’s Dairy Price index, Wednesday’s trade balance print and Thursdays CPI print as key domestic economic indicators that could prompt a break outside recent underperformance should data print to the upside.
Key MoversThe US dollar advanced through trade on Monday, buoyed by recent strength across macroeconomic indicators. In what was a relatively quiet start to the week, with minimal volatility across most major crosses. Strength across key economic indicators highlighted the gap in economic performance between the US and Europe forcing the Euro below 1.11.The Great British pound moved lower through trade on Monday following commentary suggesting Britain would not stick to EU trade rules at the conclusion of divorce proceedings and investors firmed up Bank of England rate cut bets. UK Finance Minister Sajid Javid amplified market concerns the UK will loose crucial access to European markets when suggesting Britain will seek new free trade agreements and abandon alignment with EU trade rules. The comments forced sterling back below 1.30 as attentions turn to Friday’s PMI data print. Friday’s data set remains the last key indicator that could influence next weeks Bank of England policy decision. With 65% of analysts pricing in a rate cut a strong read will likely have a bigger market impact as the likelihood the policy setting committee will remain firm increases.The Chinese Yuan touched a six month high shrugging off slowing annualized growth printed Friday, holding onto optimism new trade agreements will begin to drive improvements in global growth.
- NZD/USD: 0.6580 - 0.6650 ▼
- NZD/EUR: 0.5930 - 0.5980 ▼
- GBP/NZD: 1.9580 - 1.9880 ▲
- NZD/AUD: 0.9580 - 0.9630 ▼
- NZD/CAD: 0.8580 - 0.8680 ▼