New Zealand dollar rallies towards 63 US cents
Daily Currency Update
The New Zealand dollar is slightly stronger this morning when valued against the Greenback. The Kiwi dollar outperformed the other commodity currencies last week, ending the week just below the US$0.63 mark. On Friday NZ Consumer confidence improved a little this month but remains very low, according to the ANZ-Roy Morgan Consumer Confidence Index. The survey saw consumer confidence lifting 1.4 points in July to 81.9, still very low. That's up from a record low of 77.9 in March this year. Notably the survey shows inflation expectations dropping from 5.6% to 4.9%, the lowest rate in a year. However, the proportion of people who believe it's a good time to buy a major household item, a key indicator for retail spending, fell 4.4 points to -25, unwinding half June’s bounce.On the data today we will see the release of the monthly Building Consents for June, a leading gauge of future construction activity as obtaining government approval is among the first steps in constructing a new building. On Wednesday we will see the release of the NZ Jobless Rate. The Employment rate is forecast to fall from 3.2% to 3.1%. Finally, on Friday the Australia and New Zealand Banking Group (ANZ) will release the Commodity Price Index.
Key Movers
In the United States on Friday the US Employment Cost Index (ECI), the most comprehensive measure of US wage growth, was stronger than expected, with private sector wages and salaries increasing by a sizeable 1.6% over the quarter, taking its annual rate of wage inflation to 5.7%. Average hourly earnings data from the nonfarm payrolls report had been suggesting some moderation in wage pressure. Equity markets capped off a good week with another strong performance on Friday, the S&P500 increasing 1.4%, the NASDAQ up almost 2% and the EuroStoxx 600 index was up by more than 1% for the second day running. Over the month, the NASDAQ was up more than 12% and the S&P500 more than 9%, their best monthly performance since 2020.Looking ahead tonight in the US and all eyes will be on the Purchasing Managers' Index (PMI), which is a survey of about 800 purchasing managers and asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries and inventories. Looking ahead this week and on Thursday we will see the release of monthly Trade figures. On Friday we will see the Unemployment Rate figures, which is expected to remain steady at 3.6%.
Expected Ranges
- NZD/USD: 0.6200 - 0.6400 ▲
- NZD/EUR: 0.6100 - 0.6300 ▲
- GBP/NZD: 1.9250 - 1.9450 ▼
- NZD/AUD: 1.1000 - 1.1200 ▼
- NZD/CAD: 0.7950 - 0.8150 ▲