USD weakens on easing of post-election surge. NZD also rising strongly against the GBP.  Kiwi breaks through 200-day average

USD weakens on easing of post-election surge. NZD also rising strongly against the GBP.  Kiwi breaks through 200-day average

By Kymberly Martin

The USD has weakened against almost every major and emerging market over the past 24-hours. The exception is perhaps the GBP, which at best, now trades at a similar level to yesterday morning.

The NZD/USD has pushed up to 0.7140.

USD weakness has been the broad story since the speech by the US President-Elect yesterday morning. The New Year seems to be bringing a slightly more sober assessment of the US outlook, by the market. This follows the initial post-Election euphoria regarding the potential for fiscal stimulus led growth. We suspect markets may also need to get accustomed to a bit more volatility. The incoming President’s unique communication style leaves open the potential for perceived contradictions or shifting messages.

For now, the USD index has lost almost 2% since early yesterday morning. Amongst the major currencies the JPY and NZD have been key beneficiaries. The USD/JPY has sustained a steady downward path to trade at 114.00 currently. This is its lowest level since early-December.

After its bolt higher yesterday morning, the NZD/USD has maintained a more orderly rise though the evening and this morning. It now trades near 0.7140, having convincingly broken through the 200-day moving average. Near-term resistance will likely now be encountered on a move toward 0.7200, with December highs sitting at 0.7240.

The NZD is also stronger on the crosses. Most notably the NZD/GBP has pushed up to 0.5850. This is its highest level since early November, when it briefly attempted to nudge 0.6000. The GBP/USD made gains last evening but has subsequently given them all up, to trade at 1.2190 at present. The GBP/USD will likely remain in the unhappy bind of being caught between Brexit and Trump headlines, with UK economic dataflow taking a back seat for a while.

To the extent that data does still matter, there is a smattering of US data due tonight. Retail sales and the University of Michigan consumer sentiment index are worth looking out for.


Get our daily currency email by signing up here:

Email:  

Daily exchange rates

Select chart tabs »

The 'US$' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'AU$' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'TWI' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '¥en' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '¥uan' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '€uro' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'GBP' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'Bitcoin' chart will be drawn here.
Loading...
USD 
NZD
End of day UTC
Source: CoinDesk

BNZ Markets research is available here.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

1 Comments

Comment Filter

Highlight new comments in the last hr(s).

Buying NZDGBP at 0.3268 back in 1998 certainly worked for me. Parity cannot be far off.