NZD steady in face of USD rally
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Daily Currency Update
The New Zealand dollar opens this morning in virtually the same position as this time yesterday having given up gains won through the domestic session and early overnight trade. The Kiwi climbed steadily through the local session pushing back through US$0.61 to mark intraday highs at US$0.6131, before stronger than expected US PMI data forced a retracement through the end of offshore trade. The NZD slipped back below US$0.61 before finding support and edging higher into this morning’s open where it buys US$0.6103.While softer against the USD, the NZD continues to outperform other majors, extending gains won on the heels of the hawkish RBNZ policy statement. The NZD touched a fresh 5-week high against the AUD and continued marking new ground against the embattled yen, pushing above 96.10 for the first time since 2007.
Our attentions turn now to consumer confidence data for May and trade data for April ahead of Japanese CPI data, UK retails sales, US durable goods orders and consumer sentiment, and commentary from Fed policy makers, as key markers for direction into the weekly close.
Key Movers
The USD closed the day having clawed back early losses following a stronger than anticipated US PMI print. The dollar was broadly weaker leading into the April print, but a better than expected read cooled fears the US economy is sliding toward recession. The US composite PMI index rose 3.1 points to its highest level since April 2022, well above expectations for a flat result. When coupled with a smaller than expected jobless claims print, US treasury yields jumped through the back half of the overnight session dragging the USD higher across the board. The USD continued to test the resolve of the Bank of Japan and Ministry of Finance, pushing above 157 for the first time since officials intervened earlier this month. While up against the yen, the dollar is flat against the euro after Eurozone PMI’s ticked higher, led by gains in manufacturing. A higher than expected read helped fuel rising expectations for a broader global manufacturing recovery. Euro Area wages also rose at a faster pace than expected, yet gains were offset by an ECB report wherein it expects wage pressures will decelerate through the back half of 2024. All in pricing for an ECB rate cut in June was little changed.Our attentions turn now to Japan CPI data, UK and Canadian retails sales, and US consumer sentiment and Goods orders.
Expected Ranges
- NZD/USD: 0.6070 - 0.6150 ▲
- NZD/EUR: 0.5580 - 0.5680 ▲
- GBP/NZD: 2.0700 - 2.1000 ▼
- NZD/AUD: 0.9150 - 0.9280 ▲
- NZD/CAD: 0.8300 - 0.8400 ▲