NZD marks new 3-month high, but can it break US$0.63

Daily Currency Update

The New Zealand dollar extended its upward rally marking fresh 3-month highs amid sustained demand for risk and a broad downward correction in the US dollar. Having tracked largely sideways through the domestic session the NZD pushed through US$0.6260 marking intraday highs just shy of US$0.6290 overnight. With US markets closed for Thanksgiving, overnight trade volumes remained thin and investors appeared content in maintaining the week's risk-on trend while absorbing a dovish FOMC meeting minutes. Having fallen just short of a break above US$0.6290 the NZD has retreated on lead into this morning’s open buying US$0.6266 at time of writing. The NZD enjoyed a series of higher highs and lower lows in recent weeks; the question now is whether the NZD can extend this upward run. Having sustained a remarkable recovery since marking 24-month lows in September, the NZD is poised to make a break above the all important 200 day moving average and US$0.63. We anticipate a period of consolidation as technical signals suggest the recent upturn may be overdone, particularly given key headline risk events remain on the horizon. Our attentions turn to next week's US non-farm payroll update ahead of key US inflation data and the Fed December policy update as critical markers guiding direction into year end.