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Kiwi poised to test 12 month lows

Daily Currency Update

NZD - New Zealand DollarThe New Zealand dollar was dragged lower through trade on Wednesday, slipping below 0.63 US cents. In the absence of headline domestic indicators, the NZD was again at the mercy of broader risk trends and a bounce in the USD. The US dollar recouped losses suffered earlier in the week forcing the kiwi to fresh intraday lows at 0.6293. The NZD continued to flirt with moves either side of the 0.63 handle through the rest of the trading session and opened this morning at 0.6294. Attentions today turn to ANZ business confidence as the headline item on the domestic docket, while risk demand continues to guide broader direction. Watch supports at 0.6290/0.63 with a consolidated break opening the door for a test of 12 month lows at 0.6243.

Key Movers

The US Dollar rebounded through trade on Wednesday, bouncing off two weeks lows as an uptick in equities and repositioning of monetary policy expectations pulled the currency higher. Having touched two week lows on Tuesday the dollar index pushed back through 99 as equities recovered losses suffered across the worst four day sell off in over a year and the coronavirus continued its worrying spread across Europe, while the first case reported in Latin America was confirmed. Commentary from Fed Vice Chair Clarida also helped drive the dollar higher. Clarida confirmed, while the bank was monitoring the impacts of the coronavirus pandemic, it was still to early to suggest it will force a correction in the current monetary policy platform. The comments forced investors to reposition Fed rate expectations having priced in a higher chance of a rate cut earlier this week. The Great British Pound fell through trade on Wednesday adjusted expectations surrounding the upcoming March Budget and an anticipated uptick in fiscal spending. Having rallied strongly in the aftermath of Rishi Sunak’s appointment as finance minister investors are now correcting positions and taking profit as the likelihood of a watered-down stimulus package increases. Having slipped back below 1.30 Sterling touched 1.2904.

Expected Ranges

  • NZD/USD: 0.6240 - 0.6350 ▼
  • NZD/EUR: 0.5750 - 0.5850 ▼
  • GBP/NZD: 2.0450 - 2.0610 ▼
  • NZD/AUD: 0.9570 - 0.9660 ▼
  • NZD/CAD: 0.8365 - 0.8405 ▼