New Zealand dollar holds above US$0.61

Daily Currency Update

The New Zealand dollar is slightly weaker this morning when valued against the Greenback currently trading at 0.6124 at time of writing. The Kiwi dollar weakened on Friday falling below 0.6150 and snapping the two-day winning streak during the early Asian. On the upside, resistance is at the 0.6150- 0.6170 zone, and above at the 0.6200 level. Last week on the data front the New Zealand Institute of Economic Research (NZIER), Business Confidence aggregates revealed a further decline in business activity outlook surveys. NZIER noted that a full 35% of New Zealand firms expect the economic outlook to deteriorate on a seasonally-adjusted basis. Firm trading activity declined, with 28% of respondents noting a decline in business activity through the June quarter. The environment of higher interest rates and heightened uncertainty about the outlook has made businesses much more cautious about hiring and investment.  Looking ahead this week and on Wednesday the Reserve Bank of New Zealand (RBNZ) is expected to leave the Official Cash Rate (OCR) at 5.5% at its next monetary policy meeting next week. The central bank will likely maintain a cautious stance amid evolving economic data. However, the growing speculation that the RBNZ might cut interest rates earlier than expected in November might weigh on the New Zealand dollar.  On Thursday Statistics New Zealand will release the Food Price Index (FPI).  Although food is among the most volatile consumer price components, this indicator garners some attention because New Zealand's major inflation data is released on a quarterly basis. Finally, on Friday BusinessNZ will release the Performance of Manufacturing Index.