Daily Currency Update
NZD - New Zealand DollarThe New Zealand Dollar received a boost on Wednesday as the RBNZ left interest rates on hold. Following its bold decision to cut rates by 50 basis points in Augusts meeting, it came as no surprise to the market that there was no follow up cut at this month’s monetary policy meeting. The local currency jumped 40 points to an intraday high of 0.6348 following the announcement despite remarks from RBNZ governor that rates are expected to remain low for quite some time. Despite not specifically mentioning of any further stimulus this year, markets are currently pricing an 80% chance of a further cut of 25bps in the November policy meeting.Overnight the NZD/USD was hit by a rally in the greenback as risk appetite waned for commodity-based currencies as geopolitical risks continue to be a major theme in global markets. The 63 US cent support level was quickly broken before seeing lows on open this morning of 0.6270.
Key Movers
Supported in its movements higher was the release of new home loans in the United States as low mortgage rates stimulate the housing market. An increase by 7% in August and to a 12 year high showed sales of single-family homes were showing signs of strong improvements.Rulings in the UK by the Supreme Court have recently rocked the Great British Pound as a unanimous vote that the shutdown of parliament for a prolonged period of time by Prime Minister Boris Johnson was illegal. Putting Brexit decisions firmly up in the air again there now looks to be a push to put pressure on the PM to resign after only 8 weeks at the helm. GBP/USD moved from 1.2500 overnight to 1.2350 on open this morning.A raft of United States data is due for release this evening including final GDP figures for the quarter. Attention then shift over to Europe where both ECB President Draghi and BOE Governor Carney are due to speak this evening at an annual conference in Frankfurt.
Expected Ranges
- NZD/USD: 0.6220 - 0.6300 ▼
- NZD/AUD: 0.9250 - 0.9350 ▼
- GBP/NZD: 1.9500 - 1.9800 ▼
- NZD/EUR: 0.5700 - 0.5770 ▼
- NZD/CAD: 0.8280 - 0.8360 ▼