New Zealand dollar falls below US$0.62
Daily Currency Update
The New Zealand dollar is weaker this morning when valued against the Greenback currently trading at US$0.6121 at the time of writing. This downside of the pair could be attributed to dovish sentiment surrounding the Reserve Bank of New Zealand's (RBNZ) monetary policy stance next week. RBNZ is widely expected to deliver a 50 basis point interest rate cut amid concerns over weak economic growth and rising unemployment. Most analysts expect the RBNZ to lower its cash rate by 50 basis points in October and November, revising their previous forecast of 25 basis point cuts for each month. The RBNZ will meet this Wednesday expected to cut rates from 5.25% to 4.75%. For the rest of the week on Friday Business NZ will release the latest Performance of Manufacturing Index while Statistics New Zealand will release the latest monthly Food Price Index (FPI).Key Movers
The US Dollar Index (DXY) climbed into a fifth consecutive bullish day on Friday, driven higher by better-than-expected US Nonfarm Payrolls figures. American employers added 254,000 jobs last month in the penultimate jobs report before the US election, defying fears of a slowdown in the labour market. Job creation unexpectedly accelerated in September, while the headline unemployment rate slipped to 4.1% from 4.2% in August. Economists had forecast a non-farm payrolls reading of around 132,500 for September, after a cooler summer of employment growth. Annual wage growth also firmed up in September, rising 4.0% YoY from the previous 3.9%. Investors had expected September’s Average Hourly Earnings growth to ease back to 3.8%. With wages and net jobs additions blowing well past expectations across the board, rate market expectations of a higher pace of rate cuts have taken a huge hit to round out a middling-at-best trading week.Stocks advanced on Friday after an expectation-defying jobs report gave investors confidence in the health of the economy. The S&P 500 rose 0.9% to 5,751.07, while the Nasdaq Composite jumped 1.22% to 18,137.85. The Dow Jones Industrial Average added 341.16 points, or 0.81%, to notch an all-time closing high of 42,352.75. The S&P 500 finished up 0.22% on the week, while the Dow inched higher by 0.09%. The Nasdaq added 0.1% for the week, a major turnaround given the tech-heavy index came into Friday’s session down more than 1%. The next week will bring closely watched inflation data and minutes from the Federal Reserve’s September policy meeting. A handful of major corporate earnings reports are also due.
Expected Ranges
- NZD/USD: 0.6000 - 0.6200 ▼
- NZD/EUR: 0.5450 - 0.5650 ▼
- GBP/NZD: 2.0900 - 2.1100 ▲
- NZD/AUD: 1.0800 - 1.1000 ▼
- NZD/CAD: 0.8150 - 0.8350 ▲