Latest technical predictions for the New Zealand dollar (NZD) in the near-term issued by ANZ Research.
The NZ exchange rate complex remains under pressure despite gains from other currencies in its peer group.
Both the NZD and AUD have lost ground as markets start to factor in interest rate cuts for both countries following Canada’s surprise rate cut last week.
"It seems to be a case of lumping all the commodity currencies into one basket. Interest rate cuts are unlikely for NZ with strong economic growth, full employment and a surging housing market. Australia could probably benefit from a cut in rates but the RBA may be reluctant because of their own surging housing market in Sydney and Melbourne. The NZ Reserve Bank give us an update on Thursday morning and the Australian Reserve Bank meet next Tuesday February 3rd," says a currency note from Tuatara Managent.
The big question though concerns where the kiwi dollar will be heading next.
ANZ Research have issued their latest predictions:
The NZD remained under pressure yesterday – despite a bounce in other “risk currencies” – as markets continue to look toward Thursday’s RBNZ. The USD should remain firm today, supported by fundamental data in the form of Richmond Fed, consumer confidence, housing releases, and durable goods.
- Expected range: 0.7370– 0.7500
Cross will be driven by Australian business confidence and conditions today. Conditions have been elevated versus confidence for some time now, but confidence is unlikely to be lifted by global (or indeed Australian) events.
- Expected range: 0.9280 – 0.9400
EUR bounced overnight, as markets became more confident that the Greek situation will remain contained, while German IFO confidence continued the theme of improvements in consumer sentiment in Europe.
- Expected range: 0.6510 – 0.6630
The NZD remains the driver of this cross as markets pre-position for the RBNZ. JPY is unlikely to be a driver until the FOMC Thursday.
- Expected range: 86.80 – 88.40
Markets are looking for 0.6% q/q growth from the UK tonight, with fairly balanced risks. GBP has remained relatively strong and is probably subject to some risk of weakness; however, BoE MPC member Kristin Forbes joined the McCafferty and Weale hawkish camp suggesting rates may need to inch higher.
- Expected range: 0.4880 - 0.4960