New Zealand dollar holds above US$0.61
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Daily Currency Update
The New Zealand dollar is slightly weaker this morning when valued against the Greenback currently trading at US$0.6133 at the time of writing. The New Zealand dollar is down for a sixth straight day and has fallen 3.6% during that time. More downsides would appear if the pair breaks below the support plotted from September 11, which was low at around US$0.6100. The Kiwi would decline further towards the May 3 high of US$0.6046 and the psychological support of US$0.6000 if it breaks below the September 11 low. The Reserve Bank of New Zealand (RBNZ) meets on Wednesday and is widely expected to cut rates. The markets have priced in an oversized rate cut of 50 basis points, but a modest cut of 25 bps cannot be ruled out. The RBNZ’s latest projections have inflation falling to 2.3% in Q3. The inflation report won’t be released until next week and if the RBNZ chops rates by 50 bps and inflation is higher than the RBNZ estimate, it will put the central bank in an awkward position. Looking ahead for the rest of the week on Friday BusinessNZ 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), which measures the value of the USD against a basket of six currencies, remains flat on Tuesday. The US dollar has turned sideways after revisiting a seven-week high as investors await fresh cues about the Federal Reserve’s (Fed) possible monetary policy action in the remainder of the year. The S&P 500 rebounded on Tuesday following a losing session on Wall Street with oil prices and bond yields in focus as investors assessed ongoing tensions in the Middle East. The S&P 500 gained 0.9% and the Nasdaq Composite rose 1.4%. The Dow Jones Industrial average added 130 points, or 0.3%. The market rallied slightly to end last week after a blockbuster jobs report, and the Dow notched a new all-time closing high.A stock market rally in China has fizzled out as a highly-anticipated announcement on plans to boost the country's ailing economy disappointed investors. Shares had jumped by over 10% as trading restarted after the Golden Week holiday but fell back after a news conference by the country's economic planners. After a volatile day of trading, the Shanghai Composite Index in mainland China closed 4.6% higher, while the Hang Seng in Hong Kong slumped by 9.4%. Investors had been hoping for more information about how the government plans to support economic growth but the announcement gave little in the way of details.
Expected Ranges
- NZD/USD: 0.6050 - 0.6250 ▼
- NZD/EUR: 0.5500 - 0.5700 ▼
- GBP/NZD: 2.1250 - 2.1450 ▲
- NZD/AUD: 1.0900 - 1.1100 ▼
- NZD/CAD: 0.8300 - 0.8500 ▲