FX News

NZD/EUR: UPDATE 01/03

NZD to USD

Last week’s drop to 0.6630 in the US Dollar (USD), New Zealand Dollar (NZD) pair was brief with risk conditions improving, bouncing risk assets higher to 0.6750 into the close as Ukraine situation improved. However, the cross gapped 70 points lower to 0.6680 before recovering back to 0.6750 in early Tuesday trading. Volatility caused by mass uncertainty doesn’t mean the kiwi is on the comeback trail yet with central banks possibly rethinking their recent hawkish views and looser policy in response to ‘what could be”. The poor read in New Zealand Business Confidence in February proves there is widespread anxiety from the impact of omicron. Confidence fell to a net 51.8% of pessimistic from a net 23% pessimistic difference from the previous survey. Business activity has eased which has done nothing to bring about relaxing inflation which remains extremely high. Fed chair Powell testifies tomorrow with further confirmation likely of rate hikes on the horizon, if he backtracks the NZD should rally. Non-Farm Payroll releases Friday along with the US Unemployment Rate.

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