Home Daily Commentaries New Zealand dollar remains steady trading below US$0.60

New Zealand dollar remains steady trading below US$0.60

Daily Currency Update

The New Zealand dollar is steady this morning when valued against the Greenback currently trading at 0.5971 at time of writing. NZD/USD remains stable for the third consecutive session during the Asian hours on Friday. The New Zealand dollar (NZD) gained some support from an unexpected increase in China's factory activity, as China is New Zealand's largest trading partner. China's Caixin Manufacturing Purchasing Managers Index (PMI) rose to 50.3 in October, up from 49.3 in September, exceeding market expectations of 49.7. Additionally, the seasonally adjusted Building Permits from Statistics New Zealand showed a 2.6% month-on-month increase in new construction permits for September, following a 5.3% decline in August. The New Zealand dollar remains under pressure on expectations that the Reserve Bank of New Zealand (RBNZ) will cut interest rates gain by a larger-than-usual size of 50 basis points (bps) in its monetary policy meeting on November 27. This would push the Official Cash Rate (OCR) lower to 4.25%. Looking ahead this week and on Tuesday we will see the release of the ANZ Commodity Price Index. On Wednesday Statistics New Zealand will release the latest quarterly unemployment change which is expected to increase from 4.6% to 5.00% from the previous quarter.

Key Movers

The US dollar Index (DXY), which measures the value of the USD against a basket of six currencies, rebounded intraday despite the weak jobs data as annual wage inflation rose to 4%, indicating that inflationary pressures remain elevated. US hiring advanced at the slowest pace since 2020 while the unemployment rate remained low in October, a month distorted by severe hurricanes and a major strike at Boeing Co. Nonfarm payrolls increased 12,000 last month, and hiring over the previous two months was weaker than previously thought, suggesting the underlying labor market continues to cool. The unemployment rate held at 4.1% and hourly earnings ticked up, according to Bureau of Labor Statistics figures released Friday. Business activity in the US manufacturing sector continued to contract at a faster pace in October, with the ISM Manufacturing PMI dropping to 46.5 from 47.2 in September. This figure came in below the market expectation of 47.6. The Services PMI rose to 54.9 in October, indicating a strong expansion in the US service sector. All eyes this week will be on Tuesday's US presidential election. On Thursday, the Fed's policymakers, led by Chair Jerome Powell, are on track to cut their benchmark rate by a quarter-point, to about 4.6%, after having implemented a half-point reduction in September. Economists expect another quarter-point rate cut in December and possibly additional such moves next year. Over time, rate cuts tend to lower the costs of borrowing for consumers and businesses.

Expected Ranges

  • NZD/USD: 0.5900 - 0.6100 ▼
  • NZD/EUR: 0.5400 - 0.5600 ▼
  • GBP/NZD: 2.1500 - 2.1700 ▲
  • NZD/AUD: 1.0900 - 1.1100 ▼
  • NZD/CAD: 0.8250 - 0.8450 ▲

Written by

Brett Ottawa

OFXpert

Brett brings a wealth of experience, boasting more than 15 years in the foreign exchange market. He started his foreign exchange career with OFX more than a decade ago, as a private dealer catering to individual clients. He later transitioned to the corporate sector, assuming the position of Corporate Senior Relationship Manager. What truly excites Brett is the opportunity to engage with people, supporting their business growth and sharing in their successes.