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Kiwi Tad Firmer In Morning Trade, Market Eyes RBNZ Rate Review Next Week

NZD

NZD/USD charted a dragonfly Doji candlestick Thursday just two days after charting a gravestone Doji, suggesting that the market is indecisive about the kiwi's direction.

  • A gradual pullback in the USD inspired a parallel rebound in NZD/USD after Asia hours. Greenback losses were attributed to month-end flows, as well as recovery in GBP and EUR.
  • The risk backdrop remained unfavourable for high-betas, with equity benchmarks under pressure and the VIX index trending higher. The commodity complex was slightly weaker.
  • NZD/USD last operates at $0.5737, up 10 pips on the day, with bulls looking for a further upswing towards the $0.6000 mark. Bears keep an eye on Sep 28 cyclical low of $0.5565.
  • ANZ-Roy Morgan Consumer Confidence Index was unchanged in September at 85.4, with a familiar mixture of rising living costs, falling house prices and rising interest rates keeping sentiment at subdued levels. The pass-through from reduced willingness to buy major household items to retail sales remains limited by the still super-tight labour market.
  • Elsewhere, monthly building permits data saw a dip in M/M terms.
  • There is broad consensus that the RBNZ will raise the OCR by 50bp next week, with the OIS strip fully pricing a rate adjustment to that tune.
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NZD/USD charted a dragonfly Doji candlestick Thursday just two days after charting a gravestone Doji, suggesting that the market is indecisive about the kiwi's direction.

  • A gradual pullback in the USD inspired a parallel rebound in NZD/USD after Asia hours. Greenback losses were attributed to month-end flows, as well as recovery in GBP and EUR.
  • The risk backdrop remained unfavourable for high-betas, with equity benchmarks under pressure and the VIX index trending higher. The commodity complex was slightly weaker.
  • NZD/USD last operates at $0.5737, up 10 pips on the day, with bulls looking for a further upswing towards the $0.6000 mark. Bears keep an eye on Sep 28 cyclical low of $0.5565.
  • ANZ-Roy Morgan Consumer Confidence Index was unchanged in September at 85.4, with a familiar mixture of rising living costs, falling house prices and rising interest rates keeping sentiment at subdued levels. The pass-through from reduced willingness to buy major household items to retail sales remains limited by the still super-tight labour market.
  • Elsewhere, monthly building permits data saw a dip in M/M terms.
  • There is broad consensus that the RBNZ will raise the OCR by 50bp next week, with the OIS strip fully pricing a rate adjustment to that tune.