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US equities had minor changes overnight, staying close to their all-time highs. Bond yields increased slightly, with the US 10-year bond yield rising by 1.6bps to 4.29%. The USD remained strong as Fed Chair Powell’s comments maintained a neutral stance.
Federal Reserve Chair Powell addressed Congress, acknowledging recent positive data but stating that the committee wants more proof that inflation is returning to target levels. He also recognized the risks of delaying rate cuts or not easing enough. The overall market reaction was muted, with little impact on foreign exchange rates.
NZDUSD traded within a narrow range, dropping to just above 0.6110 overnight and rising to just over 0.6130. It has been recently influenced more by US interest rate movements. However, with RBNZ making an announcement today, the NZD could have more influence, for this to significantly impact the exchange rate, the RBNZ would need to make a substantial change in their tone or policy, which is not expected to happen before the release of next week’s Consumer Price Index (CPI) data. There are also some minor NZ economic data releases tomorrow and Friday, including price indexes and PMI.
NZDAUD traded between 0.9075 and 0.9095 overnight. It is worth keeping an eye out since the markets are predicting a higher likelihood of another interest rate hike by the RBA.
NZDJPY is close to a multi-decade high, just below 99.00, largely due to the yen’s weakness. USD/JPY is currently at 161.30.
NZDEUR is trading at 0.5665, it seems like EUR is moving sideways. The bounce after the French election, where Le Pen’s weaker-than-expected performance was initially positive, has lost momentum due to the left-wing NFP pushing for more unconventional policies. I guess there’s a risk of EUR weakness until the situation stabilizes.
Today’s economic calendar features NZ migration data at 10:45 am NZT, China’s CPI/PPI at 1:30 pm NZT, and the RBNZ Cash Rate Decision at 2:00 pm NZT. Meanwhile, Fed Chair Powell is scheduled for another session in front of lawmakers tonight.
Here are the latest mid-market rates:
| Currency Pair | Mid-market rate |
| NZD/USD | 0.6124 |
| NZD/AUD | 0.9083 |
| NZD/JPY | 98.80 |
| NZD/CNY | 4.4625 |
| NZD/EUR | 0.5663 |
| NZD/GBP | 0.4790 |
| NZD/HKD | 4.7804 |
| NZD/SGD | 0.8260 |
NZD/USD 24 HOURS
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