Kiwi underperforms, giving up much of the post RBNZ gain
Thursday 3 June, 2021
Daily Currency UpdateNZD - New Zealand DollarThe New Zealand dollar continued to underperform major counterparts in what was otherwise a lacklustre session. While most majors maintained a narrow range, the NZD gave up 0.3% on the day as investors continue to pare back last week's post-RBNZ and MPS advance. Having touched intraday highs at 0.7270 the NZD slipped toward session lows at 0.7211 before edging marginally higher into this morning’s open. Resistance seems entrenched at last week's high of 0.7315 as a lack of market conviction ensures ranges across major currencies remain narrow. We expect the NZD will continue on trend leading into Friday’s US non-farm payroll print. With estimates for US labour market performance split across a wide range, there is some scope to suggest we may enjoy some long-awaited volatility in its aftermath. A poor showing could be the catalyst to drive the NZD through resistance.
Key MoversMovement across major currencies was largely muted through trade on Wednesday as markets continued to seek a catalyst to drive direction and underpin conviction in a broader market narrative. The Canadian dollar and Norwegian kroner outperformed most counterparts, buoyed by an uptick in oil prices. With global rates stagnant and little price action across equities, the absence of a broader trend ensures ranges remain narrow. The euro continued to struggle on extensions beyond 1.22 while the GBP fails to consolidate gains above 1.42, content to bounce between 1.4100 and 1.4200. Attentions today turn to a host of European and US PMI indicators. While we expect the market will ignore headline numbers, a deep dive into the sub-content, particularly rising input costs could provide an invaluable marker for ongoing inflation trends. That said, anything short of a shock outperformance will likely see currencies confined to recent ranges in the lead up to tomorrow US non-farm payroll print.
- NZD/USD: 0.7220 - 0.7270 ▼
- NZD/EUR: 0.5890 - 0.5990 ▼
- GBP/NZD: 1.9330 - 1.9780 ▲
- NZD/AUD: 0.9280 - 0.9360 ▼
- NZD/CAD: 0.8640 - 0.8760 ▼