Kiwi gives up move above 0.7250 despite uptick in dairy prices
Wednesday 17 February, 2021
Daily Currency UpdateNZD - New Zealand DollarThe New Zealand dollar drifted lower through the overnight session, giving up gains above 0.7250 amid broader underperformance across commodity currencies. Despite sustained upside for treasuries, equities and commodity prices, particularly dairy prices, with the latest GDT dairy auction showing prices rose 3%, the seventh consecutive gain, the NZD failed to hold onto intraday highs at 0.7270, as near-term uncertainty forced investors to sell into the rally. Markets appear reluctant in extending gains significantly beyond the current support and resistance handles, instead treading water as near-term pandemic-led uncertainty grapples with long term optimism. With little of note on today’s domestic docket our attentions turn to US retail sales data this evening ahead of a slew of manufacturing and services data on Friday and next week's RBNZ policy meeting.
Key MoversIn what was a largely lackluster session across major currencies, the US dollar edged higher overnight while the euro continued to bounce between 1.21 and 1.2150, despite a widening in euro and US bond rates and a marginal upward revision in Q4 GDP. While near term ranges remain largely intact, we still anticipate the single currency will weaken through the latter half of the year as the recovering of the common marketplace lags that of other major counterparts and the divergence in vaccine schedules play a bigger role in currency values. The Great British pound edged off highs at 1.3950, briefly slipping below 1.39 before settling between 1.3910 and 1.3920 into this morning's open. With little change in the underlying market narrative, we turn our attention to US retail sales. After significant weakness in December, we anticipate a bounce back in January.
- NZD/USD: 0.7180 - 0.7270 ▲
- NZD/EUR: 0.5910 - 0.6010 ▼
- GBP/NZD: 1.9080 - 1.9420 ▲
- NZD/AUD: 0.9250 - 0.9330 ▲
- NZD/CAD: 0.9080 - 0.9220 ▲