Welcome to our daily market update, where we help keep you informed on the latest happenings in the world of FX.
If you have any questions or would like anything further explained, please don’t hesitate to reach out to your account manager or email info@cafx.com
US equities fell, influenced by mix consumer confidence data and comments from the Federal Reserve members. The DXY (dollar Index) benefited from rising bond yields, with the US 10-year yield increased by 8bps to 4.55%. The USD strengthened against most of its G10 counterparts.
NZDUSD was one the biggest losers overnight, dropping from a two and a half month high of 0.6170 to 0.6140. Since the RBNZ OCR announcement, 0.6100 has acted as a support level, but breaks above 0.6142 have been short-lived, with 0.6170 proving to be a strong resistance. If it breaks this level, we might look towards the Fibonacci level of 0.6230, but that might seem unlikely in short term. The outlook depends on the differences in interest rate expectations and market sentiment on when the Fed will cut rates compared to the RBNZ. These shifting expectations is keeping the currency volatile.
NZDAUD is currently stable around 0.9235 as the market wait for the release of Australia’s April CPI (Consumer Price Index) data today at 1:30pm NZT, it could trigger a move out of the narrow trading range the pair has been in for the past few days. Annual Australian inflation is forecasted to decrease slightly to 3.4% y/y from 3.5% in March. In April, there is typically a monthly increase in inflation around this level, which is influenced in part by seasonal upticks in prices for clothing footwear, household goods and holiday expenses.
On the other news, shipping challenges persist due to pirate attacks, political instability in the Middle East, and drought conditions are disrupting and congesting ports worldwide. While these disruptions are not as severe as those experienced during the pandemic, they are still causing delays and longer shipping routes which are resulting in higher freight costs.
Locally two key events today, New Zealand’s Business Confidence report at 1:00pm, followed by Australia’s inflation figures at 1:30pm NZT. Overnight important releases include Germany’s Consumer Price Index (CPI), the US Richmond Manufacturing Index, and the Federal Reserve’s Beige Book. Additionally, FOMC Member Williams is scheduled to speak.
Here are the latest mid-market rates:
| Currency Pair | Mid-market rate |
| NZD/USD | 0.6137 |
| NZD/AUD | 0.9231 |
| NZD/JPY | 96.50 |
| NZD/CNY | 4.4580 |
| NZD/EUR | 0.5653 |
| NZD/GBP | 0.4810 |
| NZD/HKD | 4.7939 |
| NZD/SGD | 0.8278 |
Disclaimer:
The market update provided by Corporate Alliance FX (CAFX) is for reference only and does not constitute a bid, levy, offer or invitation to offer for the financial product, the basis for any contract or commitment, a recommendation for the purchase or sale of any investment instruments, financial, legal, tax, investment advice, investment advice or other opinions. It will not be legally liable for any consequences or losses caused by the information or content involved.
Corporate Alliance Group Pty Ltd T/A Corporate Alliance FX (CAFX) (ABN 58 167 119 226, AFSL 523351) (i.e. CAFX), CAFX independently holds the Australian Financial Services licence no. 523351 (AFSL), so CAFX is regulated by the Australian Securities and Investment Commission (ASIC) and, and although ASIC is a strictly regulatory body, it does not endorse a specific financial product. ASIC’s regulation of CAFX applies to all services under the financial licence held by CAFX, including the issuance of foreign exchange settlement, foreign exchange payments, foreign exchange risk control, hedging, market making and providing financial advice.
