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NZD Struggles overnight, USD Strong ahead of GDP release

Published April 24, 2019

By Jim Watson

The Kiwi has maintained its bearish tone in overnight trade, falling to a low of 0.6630 before settling at this morning’s open at 0.6650. Notwithstanding the local pressure on the NZD which we alluded to in yesterdays commentary, we are also seeing a resurgence in the USD, with the US Dollar index (which measures the  greenback v 6 major currencies), rising  overnight to its highest level since June 2017. This rise was supported by positive news on retail sales and last night better than expected new home sales data which jumped to 18 month highs, further reinforcing the robustness of the US economy.

Directionally, what we are seeing with the Kiwi right now is good USD strength pushing down the NZD,  and with a supportive US Q1 GDP number this  Friday, there is a suggestion that, whilst most see the current period of global expansion in its latter stages, the US is better placed than other leading economies.

Elsewhere

  • GBPslid to a two month v the US, you guessed it – Brexit. Intra-party talks faltered again, and the omnipresent call for Theresa May to resign in the wake of those talks.
  • EURstruggles, with the overall outlook for the region to remain under pressure and a market increasingly anticipating an accommodating stance from the ECB later this year, as it becomes more certain that mainland Europe’s manufacturing is suffering on account of the political uncertainty.
  • AUD lost just a little ground overnight, pushing the cross with the NZD closer to 0.9400 at this morning open, and this will be due to the market range trading ahead of this afternoons CPI data release at 1:30 pm. We’ll let you know if those numbers out, or underperform, projections and drive any unexpected volatility.