Home Daily Commentaries New Zealand dollar unable to hold on to gains above 62 US cents

New Zealand dollar unable to hold on to gains above 62 US cents

Monday 21 November, 2022

Daily Currency Update

The New Zealand dollar is slightly stronger this morning when valued against the Greenback. The Changes in currency markets were modest. The NZD closed up for the fifth consecutive week at around 0.6150, after taking another peek above 0.62 on Friday night. The kiwi dollar took another look just above 62 US cents, before closing the week around 0.6150. NZD/USD pair is currently trading at 0.6119 at the time of writing. NZD/AUD was stronger, returning to the 0.92 handle seen earlier this month. Looking ahead this week in New Zealand and today we will see the Reserve Bank of New Zealand (RBNZ) release the Credit Card Spending looking at rising debt levels a sign that lenders feel comfortable issuing loans, and that consumers are confident in their financial position and eager to spend money. On Tuesday Statistics New Zealand will release the latest Trade Balance figures. On Wednesday all eyes will be on the RBNZ interest rate decision with the market forecasting the official cash rate (OCR) to rise from 3.5% to 4.25%. Market participants are currently split on whether rates will be raised by 50 or 75 basis points. Investors think the RBNZ might play it cautiously because it hasn’t raised rates by 75 bps so far and other central banks have slowed down their tightening pace lately. On Friday Statistics New Zealand will release Retail Sales figures the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

Key Movers

On Friday U.S. existing home sales tumbled for a record ninth straight month in October as the 30-year fixed mortgage rate hit a 20-year high and prices remained elevated, pushing homeownership out of the reach of many Americans. Existing home sales dropped 5.9% to a seasonally adjusted annual rate of 4.43 million units last month. Outside the plunge during the initial phase of the COVID-19 pandemic in the spring of 2020, this was the lowest level since December 2011. The 30-year fixed mortgage rate breached 7% in October for the first time since 2002, according to data from mortgage finance agency Freddie Mac. The rate averaged 6.61% in the latest week. The U.S. central bank's rate-hiking cycle, the fastest since the 1980s, has raised the risks of a recession. Looking ahead this week in the United States and on Tuesday we will see the release of the minutes from the Federal Reserve’s November policy-setting meeting are expected to help shape the holiday-shortened week ahead on Wall Street as markets look to rebound after a losing week. The U.S. stock and bond markets will be closed on Thursday, Nov. 24, in observance of the Thanksgiving holiday. Trading will also end early on Black Friday, with markets shuttering at 1 p.m. E.T.

Expected Ranges

  • NZD/USD: 0.6050 - 0.6250 ▼
  • NZD/EUR: 0.5850 - 0.6050 ▼
  • GBP/NZD: 1.9150 - 1.9350 ▲
  • NZD/AUD: 1.0650 - 1.0850 ▲
  • NZD/CAD: 0.8100 - 0.8300 ▲