New Zealand dollar trades above US$0.62
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Daily Currency Update
The New Zealand dollar is stronger this morning when valued against the Greenback currently trading at 0.6214 at time of writing. In Friday's session, the NZD/USD rose by 1.55% to 0.6235, ending the week on a strong bullish note. The pair has broken out of a short-term consolidation range and is now facing a key resistance level at 0.6250. A break above this level could lead to a further rally towards 0.6300. The NZD/JPY currency pair is consolidating sideways within a familiar range below 90.00. Technical indicators display mixed signals, with the Relative Strength Index (RSI) hinting at neutral sentiment. A break above 90.20 could signal a potential bullish continuation, opening the way towards 90.50 and 91.00. On the data front last week New Zealand Retail Sales fell by 1.2% quarter-on-quarter in the second quarter, following a downward revision to 0.4% growth in the first quarter, and exceeding market expectations of a 1.0% decline. This drop in retail activity continues the downward trend observed over the past eight quarters. The Reserve Bank of New Zealand (RBNZ) has initiated its easing cycle, lowering its Official Cash Rate (OCR) to 5.25% in August and signaling more cuts to come. Markets have fully priced in an additional 25 basis point cuts in October and November. Looking ahead to this week and on Thursday we will see the release of the ANZ Business Confidence a survey of about 1,500-2,000 businesses which asks respondents to rate the relative 12-month economic outlook. On Friday Statistics New Zealand will release the latest monthly Building Consents.Key Movers
The head of the US central bank has said "the time has come" for officials to cut interest rates, but he offered few clues as to how quickly or how far borrowing costs might come down. The speech from Federal Reserve chairman Jerome Powell was being closely watched, as rising unemployment has revived concerns about how the US economy is holding up under higher interest rates. Mr Powell said the bank was increasingly focused on the job market, as it gains confidence that the US was moving past the surging prices that started during the pandemic. Inflation, which tracks the pace of price rises, fell to 2.9% in the US last month, its lowest rate since March 2021. Traders have shifted their bets slightly towards a 0.5 percentage point cut on 18 September, but the consensus is still for a 0.25 percentage point cut. In the US, the Fed has kept its key lending rate at roughly 5.3%, a two-decade high since last July, holding off on cuts pursued by central banks in other countries, including the UK. U.S. stocks rallied closer to their records on Friday after the Federal Reserve announcement with the S&P 500 rallying 63.97 points, or 1.1%, to 5,634.61. The index is back within 0.6% of its all-time high set last month. The Dow Jones Industrial Average climbed 1.1%, and the Nasdaq composite added 1.5%. Treasury yields fell in the bond market. The Dow Jones Industrial Average rose 462.30 points, or 1.1% to 41,175.08.Expected Ranges
- NZD/USD: 0.6100 - 0.6300 ▲
- NZD/EUR: 0.5450 - 0.5550 ▲
- GBP/NZD: 2.1050 - 2.1250 ▲
- NZD/AUD: 1.0750 - 1.0950 ▲
- NZD/CAD: 0.8300 - 0.8500 ▼