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NZD: NZD/USD Ends Sell-Off, HYEFU Shortly

NZD
  • NZD/USD closed 0.26% higher at 0.5779 on Monday, ending a four day sell-off. Today the focus will be on the release of the Half-Year Economic and Fiscal Update (HYEFU), NZ's Prime Minister yesterday said "that there are incredibly challenging economic conditions”.
  • Overnight, The S&P Global US PMI was notably stronger than expected in the flash December release, with the composite rising to 56.6 (cons 55.1) from 55.1. The BBDXY closed 0.02% lower, ending a 6 day winning streak.
  • The pair trades just off the recent two year lows of 0.5754, and remains trading below below all key EMAs, signaling bearish momentum. The RSI nearing oversold territory, currently at 37, while the MACD remains only slightly negative.
  • Immediate support lies at 0.5754 (Dec 12 & Yearly lows), a break here could open a larger move lower with the next major support not until the 2022 lows at 0.5500. Resistance levels are seen at 0.5846 (20-Day EMA), a break above here and 0.5900 becomes the target.
  • RBNZ dated OIS cooled  2bps to 41bps of cuts priced in for the Feb meeting. There is a cumulative 117bps of cuts priced in through to Nov 2025.
  • The NZ-US 2yr swap  fell 2bps on Monday and now trades at -58.5bps, just off the multi-year lows of -60bps made last week.
  • Expiries: 0.5615 ($360m), 0.5650 ($400m), 0.5960 ($746.65m) for 18th NY cut
  • Today,  Half-Year Economic and Fiscal Update (HYEFU) will be released at 1100 AEST / 0800 HKT
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  • NZD/USD closed 0.26% higher at 0.5779 on Monday, ending a four day sell-off. Today the focus will be on the release of the Half-Year Economic and Fiscal Update (HYEFU), NZ's Prime Minister yesterday said "that there are incredibly challenging economic conditions”.
  • Overnight, The S&P Global US PMI was notably stronger than expected in the flash December release, with the composite rising to 56.6 (cons 55.1) from 55.1. The BBDXY closed 0.02% lower, ending a 6 day winning streak.
  • The pair trades just off the recent two year lows of 0.5754, and remains trading below below all key EMAs, signaling bearish momentum. The RSI nearing oversold territory, currently at 37, while the MACD remains only slightly negative.
  • Immediate support lies at 0.5754 (Dec 12 & Yearly lows), a break here could open a larger move lower with the next major support not until the 2022 lows at 0.5500. Resistance levels are seen at 0.5846 (20-Day EMA), a break above here and 0.5900 becomes the target.
  • RBNZ dated OIS cooled  2bps to 41bps of cuts priced in for the Feb meeting. There is a cumulative 117bps of cuts priced in through to Nov 2025.
  • The NZ-US 2yr swap  fell 2bps on Monday and now trades at -58.5bps, just off the multi-year lows of -60bps made last week.
  • Expiries: 0.5615 ($360m), 0.5650 ($400m), 0.5960 ($746.65m) for 18th NY cut
  • Today,  Half-Year Economic and Fiscal Update (HYEFU) will be released at 1100 AEST / 0800 HKT