Daily Currency Update
NZD - New Zealand DollarThe New Zealand Dollar is expected to move on offshore developments this week as improved risk sentiment helped the commodity-based currency move higher on Monday. Opening Monday morning at 0.6413, there was little movement on the release of local manufacturing sales data for the June quarter. Manufacturing fell by 0.7% as both the meat and dairy sector was the main catalyst for the decline.Markets are preparing for the latest ECB policy meeting on Thursday and Inflation data due for release in China today which looks to be the main risk event for the day.From a technical perspective, the NZD/USD pair is currently trading at 0.6427. We continue to expect support to hold on moves approaching 64 US cents, while any upward push will likely meet resistance at 0.6450.
Key Movers
It was a quieter theme in global markets overnight as attentions turned to the UK as the Great British Pound was supported by stronger than expected GDP and Manufacturing data. Sterling moved over a full cent higher from 1.2250 and capping out at 1.2380 to start the week in positive fashion. Further news supported cable as a UK bill has been passed in the House of Lords ruling out a no-deal Brexit on October 31st and has formal approval from Queen Elizabeth II. Equities and the greenback ended flat as it is widely expected the FOMC will provide further stimulus to the world’s largest economy in September. The CME Fedwatch tool currently has pricing at a 93.5% chance that the FOMC cuts interest rates by 25 basis points, up from 91% on Monday.Markets are firmly focused this week on ECB’s rate decision this week as economists are calling for a 10-basis point cut to negative 0.5% on deposit rates. The Euro fell to a five-day low of 1.1015 against the dollar on early Monday morning.
Expected Ranges
- NZD/USD: 0.6400 - 0.6450 ▲
- NZD/AUD: 0.9300 - 0.9400 ▼
- GBP/NZD: 1.9000 - 1.9400 ▲
- NZD/EUR: 0.5780 - 0.5840 ▼
- NZD/CAD: 0.8400 - 0.8500 ▲