New Zealand dollar trades above 62 US cents
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Daily Currency Update
The New Zealand dollar is slightly weaker this morning when valued against the Greenback, currently trading at 0.6148 at time of writing. The Kiwi dollar rose sharply on Wednesday, a move to near US$0.6230. The kiwi dollar rallied despite calls the Reserve Bank of New Zealand (RBNZ) is expected to further soften its Official Cash Rate (OCR) due to weak economic performance. Further upside above the September 6 high of US$0.6250 would drive the asset towards the September 2 high of US$0.6300, followed by this year's high of US$0.6330. On the local data front, yesterday's Westpac McDermott Miller Consumer Confidence Index rose by 9 points to 90.8 in September, indicating a slight improvement in New Zealanders' outlook on the economy. While confidence remains low, the rise suggests that some of the previous pessimism is easing. Despite this increase, New Zealand households continue to feel the strain on their finances, driven by the rising cost of utilities, rates, insurance, and other essentials. Although recent tax cuts have provided some relief, many households report their financial situation has worsened over the past year. Looking ahead today and Statistics New Zealand will release the latest quarterly Gross Domestic Product (GDP) figures which are expected to be -0.4% down from the previous quarter 0.2%. On Friday, the Reserve Bank of New Zealand will release the latest Credit Card Spending, which is correlated with consumer spending and confidence. Rising debt levels are a sign that lenders feel comfortable issuing loans, and that consumers are confident in their financial position and eager to spend money.Key Movers
The US Federal Reserve has cut its benchmark interest rate by an unusually large half-point, a dramatic shift after more than two years of high rates helped tame inflation, but that also made borrowing painfully expensive for American consumers. The rate cut, the Fed's first in more than four years, reflects its new focus on bolstering the job market, which has shown clear signs of slowing. Policymakers voted 11-to-1 in favour of lowering the US central bank’s benchmark rate to between 4.75% and 5.00%, the Fed announced in a statement. Stocks surged in reaction to the news, as the central bank’s move confirms recent bets on Wall Street that the central bank would opt for a jumbo interest rate cut over a quarter-point cut. The Fed said its rate-setting committee “has gained greater confidence that inflation is moving sustainably toward 2%, and judges that the risks to achieving its employment and inflation goals are roughly in balance.” Looking ahead, the Fed has indicated the possibility of two to three additional 25 basis point rate cuts in the upcoming meetings of 2024, underscoring the committee's cautious stance amidst an uncertain economic outlook.Expected Ranges
- NZD/USD: 0.6100 - 0.6300 ▲
- NZD/EUR: 0.5450 - 0.5650 ▲
- GBP/NZD: 2.1150 - 2.1350 ▲
- NZD/AUD: 1.0750 - 1.0950 ▼
- NZD/CAD: 0.8350 - 0.8550 ▼