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Kiwi soars 0.68% to break through the 0.7 level

Friday 19 November, 2021

Daily Currency Update

NZD - New Zealand dollar

The New Zealand dollar opens this morning as the best performer of the majors, opening at 0.7044 and recording a 0.68% gain in 24 hours. While global markets were relatively quiet, the Kiwi did benefit from broader US dollar weakness as well as a surprising Survey of Expectations. The RBNZ released their survey of expectations yesterday afternoon reporting its 2-year ahead inflation expectation at 2.96%, a result which is significantly higher than the 2.27% reported last quarter. The 2-year ahead expectations tend to be aligned with headline inflation which in turn, was driven by the 4.9% CPI report recorded in Q3. As a consequence, the rise was expected to an extent but this was certainly a little higher than expected and it sent the Kiwi soaring. Moving into the close of the week, the Kiwi has little to digest domestically. Attentions will turn back to the US however with a Treasury Currency Report due for release as well as a number of FOMC speeches.

Key Movers

The Turkish lira has continued its poor run and fallen another 3.74% after the Central Bank cut the cash rate by 100BPS overnight. The new record low comes off the back of President Erdogan replacing senior central bank officials with sycophants sympathetic to his unconventional view that higher interest rates cause higher inflation. With inflation already running at nearly 20% year on year, its going to be interesting period for the Turkish lira. On the opposite end of the spectrum is the euro, which rose 0.46% overnight against the Greenback after hitting its lowest level since July 2020 this week. The welcome bounce back came from broader US dollar weakness.

Expected Ranges

  • NZD/USD: 0.9617 - 0.9734 ▲
  • NZD/EUR: 0.8818 - 0.8925 ▲
  • GBP/NZD: 0.6154 - 0.6229 ▲
  • NZD/AUD: 1.9051 - 1.9283 ▼
  • NZD/CAD: 0.7001 - 0.7085 ▼