Home Daily Commentaries NZD unable to hold 11-week highs in the face of stronger US data

NZD unable to hold 11-week highs in the face of stronger US data

Matt Richardson
Written by
Matt Richardson

Matt Richardson

OFXpert

Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange.

| Wednesday 29 May, 2024

Daily Currency Update

The NZD enjoyed mixed fortunes through trade on Tuesday, marking fresh 11-week highs before retreating to close the day lower. Positive risk sentiment saw the NZD extend gains beyond US$0.6150, touching an 11-week high at US$0.6170 before stronger than anticipated US consumer confidence data and a weaker than expected US treasuries auction sparked a break back toward US$0.6140. With most majors range bound the NZD moves against other crosses were negligible and our attention turns to the ANZ NZ business outlook survey. We are keenly attuned to the inflation/pricing indicator as a key marker of possible RBNZ policy action. The RBNZ has clearly highlighted its focus on inflation and is seemingly unconcerned with the weak state of economic growth. Having enjoyed a series of higher highs and higher lows through the last 3 weeks the ND remains in an uptrend but a break above US$0.62 will likely require a fresh catalyst. We are keenly attuned to Friday’s US PCE deflator index as a key measure of US inflation and a possible marker to drive volatility into the weekend.

Key Movers

Price action across major currencies was largely muted through trade on Tuesday with the USD recovering losses suffered through the Asian and European sessions on the back of stronger than expected US consumer confidence and a weak US treasury auction. Treasuries yields rallied following softer than expected demand for US treasury bonds, helping fuel USD gains won following a surprise jump in the conference boards measure of consumer confidence. Leading data had suggested consumer confidence was beginning to falter but the strong print has elevated expectations around US rates with the economy seemingly strong enough to withstand an extended period of higher rates.
While it had little net impact on currency markets the Japan Services PPI report rose near 3% in April to its highest point in over 30 years, elevating calls for the Bank of Japan to tighten policy further. After forcing the USD back toward ¥156.50 the yen gave up gains and again is trading near ¥157.20.
Our attention today turns to German CPI numbers and the Fed’s beige book for direction leading into June Central Bank policy updates.

Expected Ranges

  • NZD/USD: 0.6080 - 0.6180 ▼
  • NZD/EUR: 0.5600 - 0.5700 ▼
  • GBP/NZD: 2.0600 - 2.0900 ▲
  • NZD/AUD: 0.9180 - 0.9280 ▼
  • NZD/CAD: 0.8320 - 0.8420 ▲

Written by

Matt Richardson

OFXpert

As a Senior Corporate Client Manager, Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange. Matt has clients who he has been working with for over a decade, a testament to his knowledge and dedication in the field. Matt is also a regular contributor on Ausbiz, offering clear and precise updates on currency market trends, showcasing his ability to interpret complex financial data into actionable insights.

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