NZD marks highest level since January despite stronger US data
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Daily Currency Update
The New Zealand dollar outperformed through trade on Thursday, buoyed by higher near-term rate expectations following a shift in domestic business confidence. The ANZ business outlook survey offered a glimmer of hope in what has otherwise been a bleak macroeconomic landscape. The survey showed a lift in confidence and activity indicators following the RBNZ’s dovish pivot in July and rate cut this month. Headline confidence rose to its highest level in nearly 10 years and when combined with fiscal policy designed to stimulate the economy, hopes New Zealand will rebound out of recession before the end of the year lifted. The NZD extended recent gains, touching intraday highs just short of US$0.63, its highest level since January 1, before USD support forced a correction back toward US$0.6260.Our attentions turn now to a crowded macro ticket with domestic consumer confidence data dominating the local docket, while Tokyo CPI, Australian Retail Sales, Euro CPI, Canadian GDP and US PCE deflators lead us into the weekly close.
Key Movers
The US dollar was among the notable top performers through Thursday, with the US DXY index climbing three tenths of one percent, while the euro and GBP both moved lower. US data releases mostly exceeded expectations, with Q2 GDP data surprising analysts as the economy grew at a faster pace than anticipated, with consumer consumption data proving remarkably resilient. US jobless claims stayed flat, driving US treasuries higher, making solid gains against European yields, as euro macro data fell short of expectations. German CPI data fell faster than expected, marking its lowest reading in three years, while Spain’s inflation fell quicker than expected, reinforcing expectations for another 25 basis point rate cut from the ECB. The Euro fell 0.4% for the day and is down almost 1 cent for the week, coming off highs above 1.12 on Monday to settle near 1.1105 on open this morning.Our attentions turn now to a crowded macro ticket with Tokyo CPI, Australian Retail Sales, Euro area CPI, Canadian GDP and US PCE deflators leading us into the weekly close.
Expected Ranges
- NZD/USD: 0.6150 - 0.6350 ▲
- NZD/EUR: 0.5580 - 0.5720 ▲
- GBP/NZD: 2.0920 - 2.1120 ▼
- NZD/AUD: 0.9120 - 0.9250 ▲
- NZD/CAD: 0.8400 - 0.8500 ▲