Daily Currency Update
NZD - New Zealand DollarThe New Zealand dollar tracked sideways through trade on Tuesday, maintaining a relatively narrow range despite souring demand for risk and broad-based US dollar strength. The NZD edged lower throughout early parts of the local session, dragged lower by increasing AU-China political tension and a dampening in risk demand. Cross buying and a move away from the AUD then helped drive the Kiwi toward resistance at 0.6680 and intraday highs at 0.6672 before broad based US dollar strength and an overwhelming run of negative headlines dampened demand for risk. Fiscal relief talks in the US have seemingly come to nought as Senate Republicans push for a reduced rescue plan. Having drifted back toward intraday lows at 0.6630 the NZD has edged higher into this morning’s open and currently buys 0.6650 Us cents.Attentions remain with the broader risk narrative and the NZD seems entrenched again within a narrow trading band. We expect ranges will hold through the short term with broader support and resistance at 0.64 and 0.68 intact through the rest of the year.
Key Movers
The US dollar advanced against a basked of major currencies, buoyed by a shift in market demand for risk and a broader Euro sell off. Investors adopted a cautious attitude to risk, following a slew of negative headlines through the last 24 hours. With US fiscal stimulus talks seemingly breaking down again and hopes for a COVID-19 vaccine dealt a blow after Johnson & Johnson announced its study was paused following an unexplained reaction in one test participant. The dollar index rose over half a percent, marking its largest daily appreciation in three weeks. The Euro and GBP were the days big losers down 0.6 and 1% respectively as talks between EU and UK leaders remain at an impasse. Key diplomats in Brexit trade negotiations have been unable to reach a compromise on a number of sticking points to date and Thursday's EU summit, the self-imposed deadline, appears unlikely to result in a end to the stalemate. The single currency fell below 1.1740 while Sterling gave up 1.30, pushing back toward 1.2925. Brexit negotiations remain front and centre for both currencies and while there is optimism an 11th hour deal will be struck; hopes are fading rapidly with a hard Brexit seemingly more and more likely.
Expected Ranges
- NZD/USD: 0.6580 - 0.6690 ▼
- NZD/EUR: 0.5580 - 0.5690 ▲
- GBP/NZD: 1.9320 - 1.9680 ▼
- NZD/AUD: 0.9215 - 0.9330 ▲
- NZD/CAD: 0.8690 - 0.8780 ▲