NZD outperforms on stronger Chinese yuan

Daily Currency Update

NZD - New Zealand DollarThe New Zealand dollar was the best performer on the day, as it rose from 0.6620 to 0.6657 during overnight trade. The Australian dollar also performed well, initially breaking through the 0.7200 handle to touch intraday highs of 0.7209, before retreating to levels around 0.7175 during trade. In the cross, the NZD outperformance saw the AUD/NZD cross fall about 50 points to 1.0800. With US economic data mixed and only modest gains in global equities, NZD and AUD strength overnight is being attributed to a stronger Chinese yuan. With the Chinese economy faring much better than the US and Europe in response to COVID-19, the CNY had its best quarter in 12 years in Q3 and continued its ascent by rising 0.4% against the greenback overnight. Looking to the day ahead, we have domestic consumer confidence data and retail sales data from across the pond. We then look offshore to euro area CPI data, which is expected to show a modest recovery before rounding out the session with US labor market data. NZD/USD traders will be looking at 0.6680 as the next level of resistance after overnight moves. A break through this level could open up moves to 0.6700 and beyond.