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Market Update 31/10/2024

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

Equities showed mixed performance as markets anticipated upcoming earnings reports from tech giants Microsoft and Meta, as well as the US elections next week. The S&P 500 remained flat, while the Euro Stoxx 50 and FTSE 100 ended down by 1.3% and 0.7%, respectively. The yield on the US 10-year held steady at 4.25% despite strong economic data from the US.

US GDP grew at a strong 2.8% annualized rate in Q3, following a 3% gain in the previous quarter, driven by increased household spending ahead of the election and a boost in federal defence spending. Consumer spending, the largest component of the economy, rose 3.7% the fastest pace since early 2023, mainly due to broad increases in goods, including vehicles, household furnishings, and recreational items.

The US ADP non-farm report showed private sector employment rose by 233k in October, with September’s figures revised upward. This marks the strongest hiring increase in over a year, highlighting a robust demand for workers. These ADP results indicate that the labor market remained resilient despite two hurricanes affecting the Southeast and a strike involving thousands of Boeing employees.

NZDUSD briefly traded above 0.6000 but has eased off as the local market opens. Over the past month, the currency has seen significant movement. It started the month near the upper end of its two-year range, with an overbought level of 0.6350, and now appears likely to close oversold, closer to the lower end of the two-year range around 0.5950, aligning with one-year uptrend support. Gradual support is expected from these levels, presenting an attractive outlook for exporters, even accounting for forward points. Key support levels are at 0.5950, 0.5930 and 0.5900, with resistance around 0.5980, 0.6010 and 0.6035.

NZDAUD was largely unaffected by yesterday’s Australian CPI data, which came in slightly below expectations at 2.8% YoY compared to the anticipated 2.9%. However, it has eased slightly from its recent peak of 0.9120.

NZDGBP recovered above 0.4600 after hitting new multi-week lows yesterday. UK Chancellor Rachel Reeves announced £40 billion in tax increases, primarily targeting businesses and higher-income individuals, explaining that these measures are necessary to address the fiscal gap left by previous Conservative leadership and to support Labour’s commitment to a decade of national revitalization.

Today’s economic calendar includes ANZ Business Confidence at 1:00 pm, followed by Australian Building Approvals and Retail Sales at 1:30 pm NZT, with China’s PMI report adding interest at 2:30 pm as we approach month-end. Later, European CPI, along with US Personal Income, Spending, and Initial Jobless Claims, will also be released.

Here are the latest mid-market rates:

Currency Pair Mid-market rate
NZD/USD 0.5974
NZD/AUD 0.9090
NZD/JPY 91.61
NZD/CNY 4.2566
NZD/EUR 0.5504
NZD/GBP 0.4610
NZD/HKD 4.6422
NZD/SGD 0.7898

 

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