NZD edges higher, piggybacking on AUD gains and hawkish RBA
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Daily Currency Update
The New Zealand dollar advanced through trade on Tuesday, dragged higher by a hawkish RBA and softer than expected US retail sales. The NZD slid off highs above US$0.6130 toward the end of the domestic session before extending below US$0.61. Having touched intraday lows at US$0.6099 the NZD then found support on the heels of the RBA’s hawkish statement piggybacking through domestic session highs and extending gains on softer US retail sales. The NZD extended toward intraday highs at US$0.6147 overnight with our attention now focused on the speech from RBNZ Chief Economist Paul Conway. Conway is set to speak on inflation and the road back to 2%. While I am sure Conway will be measured in his remarks we will be keenly attuned to any clues as to the path and trajectory of Monetary Policy moving through H2.Key Movers
Softer US retail sales and a decline in US treasury yields drove the USD lower through trade on Tuesday with the USD DXY index down nearly two-tenths of a percent. The USD is facing increasing headwinds from softer local data prints and as we creep toward a Federal Reserve Rate cut we expect to see further US dollar weakness. That said safe haven support throughout June should remain intact as market volatility elevates amid European political uncertainty. Attentions remain affixed to the French election race. The euro traded flat for the day hovering near US$1.0750 while the GBP edged above US$1.27 and the yen staved off attempts to consolidate a break above ¥158 having given up intraday highs at ¥158.20.Our focus now turns to UK CPI data ahead of the Bank of England Policy meeting tomorrow and a slew of European and US manufacturing and service PMI data Friday.
Expected Ranges
- NZD/USD: 0.6080 - 0.6180 ▲
- NZD/EUR: 0.5650 - 0.5750 ▲
- GBP/NZD: 2.0600 - 2.0800 ▼
- NZD/AUD: 0.9200 - 0.9300 ▼
- NZD/CAD: 0.8380 - 0.8480 ▲