Home Daily Commentaries NZD falters as risk aversion drives direction

NZD falters as risk aversion drives direction

Matt Richardson
Written by
Matt Richardson

Matt Richardson

OFXpert

Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange.

| Friday 21 March, 2025

Daily Currency Update

The New Zealand dollar was a notable underperformer on Thursday, faltering amid elevated risk aversion. The NZD fell steadily through late Asian trade and the overnight session, as growing uncertainty surrounding US trade policy forced investors toward haven corridors. Having started the day above US$0.5825, the NZD marked intraday lows at US$0.5725, before finding support and settling near US$0.5750 leading into this morning’s open. The NZD is also lower against the euro, falling below 0.53, while sliding against the pound to mark a fresh 1 week low below 0.4450. Notably, the NZD outperformed the AUD after a stronger than expected domestic GDP print and weaker Australian employment data propelled the NZD through 0.9150, before correcting lower and trading between 0.9120 and 0.9140 through overnight trade.

With little headline macroeconomic data on the docket to close the week our attentions remain affixed to US trade policy and geo-political tensions.

Key Movers

Risk aversion steered currency markets through trade on Thursday, allowing the USD to enjoy gains against almost all major pairs. The DXY index advanced 0.36% as the euro, GBP and JPY all gave up ground. US data had little lasting impact and markets largely ignored an extended decline in US yields. Uncertainty surrounding US trade policy remains front and centre, driving risk sentiment. Reports the US has tightened sanctions on the Iranian oil sector as well as introducing sanctions on Chinese refineries and 12 other entities elevated fears an all-out trade war is inevitable. The new sanctions helped lift oil prices, allowing the CAD and NOK to hold firm against the stronger dollar.

With little headline macroeconomic data on the docket to close the week, our attentions remain affixed to US trade policy. The completion of the US trade departments reciprocal tariff review in early April and the response from major trading partners will prove key in shaping direction and sentiment through the weeks ahead.

Expected Ranges

  • NZD/USD: 0.5700 - 0.5850 ▼
  • NZD/EUR: 0.5250 - 0.5350 ▼
  • GBP/NZD: 2.2400 - 2.2700 ▲
  • NZD/AUD: 0.9050 - 0.9150 ▲
  • NZD/CAD: 0.8200 - 0.8300 ▲

Written by

Matt Richardson

OFXpert

As a Senior Corporate Client Manager, Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange. Matt has clients who he has been working with for over a decade, a testament to his knowledge and dedication in the field. Matt is also a regular contributor on Ausbiz, offering clear and precise updates on currency market trends, showcasing his ability to interpret complex financial data into actionable insights.

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