New Zealand dollar holds above US$0.60
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Daily Currency Update
The New Zealand dollar is slightly weaker this morning when valued against the Greenback, currently trading at 0.6004 at time of writing. In Friday's session, the NZD/USD sustained its downward momentum, dropping by 0.65% to touch 0.6010. Resistance presently resides at the former support level of 0.6070 and then around 0.6100. On the other hand, strong support is now observed at the formidable 0.6000 line. The NZD/JPY pair extended its losses and slumped to 94.65, marking a 0.50% decline. Even though a slight rebound occurred on Thursday, the pair ended the week with approximately 2% losses, underscoring a continuously negative outlook. On the data front last week, inflation in New Zealand, as measured by the change in the Consumer Price Index (CPI), drops to 0.4% QoQ in the second quarter (Q2) of 2024 from 0.6% in the previous reading, Statistics New Zealand reported on Wednesday. The figure was below the market consensus of 0.6%. Annualised CPI inflation in New Zealand came in at 3.3% YoY compared to the previous period's 4.0%, weaker than the estimation of 3.5%. Looking ahead this week and today Statistics New Zealand will release the latest Trade Balance figures for the month. Export demand and currency demand are directly linked because foreigners must buy the domestic currency to pay for the nation's exports. Export demand also impacts production and prices at domestic manufacturers.Key Movers
US President Joe Biden has ended his bid for re-election, opening the way for another Democratic candidate to take on Republican Donald Trump in November’s election. On Sunday afternoon (US time), Mr Biden declared it was in the “best interest” of the Democratic Party and the country for him to drop out of the 2024 US presidential race. He also endorsed Vice President Kamala Harris to replace him on the ballot. The Democratic National Convention, where delegates will formally select the nominee, is scheduled to take place in Chicago in mid-August. Mr Biden will remain President until the end of his term next January.On the data front last week, the US reported that Retail Sales remained pretty much unchanged in June, as expected, although the core reading, Retail Sales ex Autos, rose 0.4%, better than the previous 0.1%. Looking ahead to this week, the country will release the first estimate of the Q2 Gross Domestic Product (GDP) and the June Personal Consumption Expenditures (PCE) Price Index, the Fed's favourite inflation gauge. The PCE index stood at 2.5% YoY in May, and any reading below such a level should fuel hopes for a September cut. The US Dollar Index, which tracks the currency's performance against six other currencies, is up 0.18% at 104.34. US Treasury bond yields are also rising across the yield curve, with the 10-year Treasury note yielding 4.233%, up more than three basis points (bps).
Expected Ranges
- NZD/USD: 0.5900 - 0.6100 ▼
- NZD/EUR: 0.5400 - 0.5600 ▼
- GBP/NZD: 2.1350 - 2.1550 ▲
- NZD/AUD: 1.1000 - 1.1200 ▼
- NZD/CAD: 0.8150 - 0.8350 ▲