New Zealand dollar trades above 62 US cents

Daily Currency Update

The Kiwi dollar is slightly stronger this morning, when valued against the Greenback. With a dovish 25 bps hike, markets are pricing for the Fed's tightening cycle nearing an end and the US Dollar was sold off to test the bottom end of 102 DXY. Consequently, the NZ Dollar flew to a fresh high for the month at 0.6282 and was up from a low of 0.6171. Analysts are still indicating it’s a bit of a tug of war between stock and flow, with the bullish flow traders citing the cyclone rebuild, remoteness from global banking issues, Reserve Bank of New Zealand hawkishness, and the bearish stock traders citing our current account deficit, one-trick pony housing-centric economy, and credit ratings at risk.

On the local data front, yesterday the Westpac McDermott Miller Consumer Confidence Index rose 2.1 points in the March quarter to a level of 77.7. However, that follows a sharp fall over the past year, and still leaves confidence at extremely weak levels. To put the results of our latest survey in context, confidence remains around the sorts of levels that we saw during the recession in the early-1990s and again during the Global Financial Crisis in 2008/09. Financial pressures continue to be the big concern that is worrying New Zealanders, with increasing numbers of households telling us that their financial position has deteriorated over the past year. Compounding the pressure on households’ finances have been large increases in borrowing costs. The Reserve Bank has been hiking the Official Cash Rate at a rapid pace to offset the rise in inflation. That’s seen mortgage rates rising to their highest levels in more than a decade. There are no scheduled releases today in New Zealand.