The New Zealand Dollar (NZD) closed the week around 0.5590 against a rampant US Dollar (USD) just off the midweek low at 0.5560 the March 2020 level. US Dollar (USD) strength remains a key factor across currencies with the Federal Reserve defiant they will continue with their steep tightening cycle in the wake of deepening recession prospects. Predictions are for the US economy may face a hard landing in 2023 with a tight labour market and reports the housing market is turning amid a market which is highly leveraged- a sign for tough times ahead. Meanwhile the September PMI index is down, the lowest since September 2020 putting the big dollar under pressure into Tuesday. The RBNZ are setting up for their fifth consecutive hike Wednesday of 50 points, Orr saying earlier he sees the tightening cycle as “mature” and “well advanced”. It’s hard to see any signs of a decent reversal higher in the pair but we could see a spike around the cash rate release.
Current Level: 0.5720
Last Weeks Range: 0.5564-0.5748