New Zealand Dollar Exchange Rate Following Stock Market Trends as Fed Hike Disappointment Boosts Commodity Bloc
A resumption in the decline of dairy prices put the New Zealand Dollar under pressure again on Friday and the commodity-driven currency registered declines against several of its major peers. The GBP-NZD and USD-NZD currency pairs also gained as positive US growth data supported interest rate hike speculation. Next week global economic developments and commodity price shifts are more likely to impact the New Zealand Dollar than the nation's limited domestic data.
Earlier...
Tuesday’s less than impressive New Zealand Trade Balance, which posted at -649 million rather than the forecast -600 million, was distinctly overshadowed by the unfolding events on the global stock markets. After the decimation of commodity prices in the midst of Black Monday’s panicked rout a reversal in trader sentiment on the following day helped shored up the floundering ‘Kiwi’. As bargain hunting boosted shares a surge of profit-taking saw the South Pacific currency jump against many of the majors.
A quick foreign exchange market summary before we bring you the rest of the report:
On Friday the Pound to British Pound exchange rate (GBP/GBP) converts at 1
At time of writing the pound to pound exchange rate is quoted at 1.
The GBP to EUR exchange rate converts at 1.168 today.
The live inter-bank GBP-CAD spot rate is quoted as 1.711 today.
The pound conversion rate (against australian dollar) is quoted at 1.941 AUD/GBP.
FX markets see the pound vs us dollar exchange rate converting at 1.241.
NB: the forex rates mentioned above, revised as of 19th Apr 2024, are inter-bank prices that will require a margin from your bank. Foreign exchange brokers can save up to 5% on international payments in comparison to the banks.
Although the US published an unexpectedly strong Durable Goods Order figure yesterday any dampening effect this might have had on the New Zealand Dollar was swiftly mitigated by comments from New York Federal Reserve President Bill Dudley. One of the more vocal members of the Federal Open Market Committee (FOMC) in favour of a September interest rate hike, Dudley’s admission that the argument for an imminent take-off is now ‘less compelling’ than previously indicates that the possibility is now all but gone. Freeing the ‘Kiwi’ from the long-standing threat of Fed tightening this, together with the news of further Chinese market intervention, prompted the currency to climb across the board.
However, with cautions today from the dairy industry warning that prices could well fall again at next week’s GlobalDairyTrade auction due to the current level of production continuing to outstrip demand, it seems that the New Zealand Dollar is far from safe from the possibility of another significant slump.
UK Housing Data Fails to Boost GBP-NZD Conversion Rate Against Dominant ‘Kiwi’ (NZD)
Stronger than anticipated performances on both the UK BBA Loans for House Purchase and Nationwide Housing Prices figures lent some strength to the Pound by virtue of increased confidence in the both the domestic sentiment of banks and the health of the housing sector. As the FTSE 100 claimed back more lost ground today, however, the GBP/NZD exchange rate has remained on a distinct downtrend. Nevertheless, the pairing has yet to fall back to its pre-Black Monday levels, presently at 2.3873.
Euro (EUR) in Decline after Bearish ECB Outlook Drives off Investors as Decreased Risk Aversion Benefits ‘Kiwi’ (NZD) Today
After rather dovish comments from European Central Bank (ECB) Executive Board Member Peter Praet, bringing the possibility of near-term interest rate cuts onto the table, the common currency has lost a lot of its previous favour with pundits. With the returning bounce back of stocks around the world the EUR/NZD pairing has suffered from another round of profit-taking amidst a decreased atmosphere of risk aversion. Slumping again, the EUR/NZD exchange rate is currently sharply down at 1.7459.
Today's Foreign Exchange News: AUD-NZD Exchange Rate Movement Minimal as Commodities Continue to Regain Lost Ground
With the ‘Aussie’ similarly benefitting from the upturn in favour for the commodity bloc the AUD/NZD exchange rate is presently trending quite narrowly. Concerns over the state of the Chinese economy, and its demand for exports, is still weighing on the antipodean currency in particular in spite of metals such as copper and iron ore moving away from the multi-year lows of the early week.