New Zealand dollar trades below US$0.61
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Daily Currency Update
The New Zealand dollar is slightly weaker this morning when valued against the Greenback currently trading at 0.6084 at the time of writing. The NZD/USD pair comes under some renewed selling pressure following the previous day's brief pause and dives to its lowest level since mid-May during the Asian session on Friday. The New Zealand dollar is also weighed down by expectations that the Reserve Bank of New Zealand (RBNZ) will cut rates earlier than projected. Also on Friday, the NZD/JPY cross made significant strides, gaining momentum and setting new cycle highs beyond 98.00. Notably, this represents the pair's highest position since 2007, substantiating the strong bullish bias. Last week on the data front New Zealand business confidence eased in June, with every sector except agriculture reporting weaker activity than a year earlier, an ANZ Bank survey showed on Thursday. The survey's headline measure showed a net 6.1% of respondents expected the economy to improve over the year ahead, versus an 11.2% optimism level in the previous poll in May. A net 12.2% of respondents expected their own businesses to grow in the next 12 months, versus 11.8% last month. Looking ahead this week and on Tuesday Statistics New Zealand will release the latest monthly Building Consents. It's a leading gauge of future construction activity because obtaining government approval is among the first steps in constructing a new building. On Thursday we will see the monthly Australia and New Zealand Banking Group (ANZ) Commodity Price Index which tends to have a muted impact because the tightly-correlated Australian commodity prices are usually released a few days earlier.Key Movers
In the US on Friday U.S. monthly inflation was unchanged in May as a modest increase in the cost of services was offset by the largest drop in goods prices in six months, drawing the Federal Reserve closer to start cutting interest rates later this year. May’s Personal Consumption Expenditures (PCE) showed headline inflation softens to 2.6% YoY, down from the previous month’s 2.7%. Core PCE (which excludes volatile food and energy prices) has also experienced a decline to 2.6% from the previous 2.8% in April. Financial markets saw a roughly 68% chance that the Fed's policy easing would start in September compared to about 64% before the data, though policymakers recently adopted a more hawkish outlook. The U.S. central bank has maintained its benchmark overnight interest rate in the current 5.25%-5.50% range since last July. At the time of writing, the US dollar Index (DXY), which tracks the Greenback’s value against six major currencies, falls to 105.80.Expected Ranges
- NZD/USD: 0.6000 - 0.6200 ▼
- NZD/EUR: 0.5550 - 0.5750 ▼
- GBP/NZD: 2.0600 - 2.0800 ▲
- NZD/AUD: 1.0800 - 1.1000 ▼
- NZD/CAD: 0.8200 - 0.8400 ▲