Kiwi dollar remains under selling pressure
Daily Currency Update
The New Zealand dollar remained under selling pressure last week, testing the monthly low of 0.6940, as the Greenback got strength amid rising cases of Delta virus across Europe and Asia. However, the safe-haven appeal of the US dollar keeps it underpinned. The NZD/USD pair witnessed heavy selling pressure in the American session on Friday retreating further from near three-week levels just above the 0.7100 mark. Meanwhile the Reserve Bank of New Zealand (RBNZ) will announce its bond purchasing program. The Bank of New Zealand (BNZ) expected the program would end soon irrespective of the RBNZ decision to hold the amount steady at $200m or reduce it.On the data front the macroeconomic calendar is very light. There are no scheduled releases in New Zealand today. On Wednesday we will see the release of both the Global Dairy Trade and Credit Card Spending for the month of June. On Friday we will see the release of the quarterly Consumer Price Index (CPI) where we are looking for a 0.7% quarterly increase, taking the annual rate to 2.7%. The market will also closely watch the core inflation figures, which were already around the 2% target midpoint last time and are surely biased higher. From a technical perspective, the NZD/USD pair is currently trading at 0.6993. We continue to expect support to hold on moves approaching 0.6922 while now any upward push will likely meet resistance around 0.7060.
Key Movers
On the data front in the US we saw the release of official US ISM Services PMI for the month of June. The Institute for Supply Management said its non-manufacturing activity index fell to 60.1 last month from 64.0 in May, which was the highest reading in the series’ history. A reading above 50 indicates growth in the services sector, which accounts for more than two-thirds of U.S. economic activity. Initial Jobless Claims for the week ending July 3, the advance figure for seasonally adjusted initial claims was 373,000, an increase of 2,000 from the previous week's revised level. US government bond yields soared on Friday, sending yields to their lowest levels since last February. The yield of the 10-year US Treasury yield bottomed at 1.25%, recovering toward the 1.35% area but the end of the week.Expected Ranges
- NZD/USD: 0.6900 - 0.7100 ▼
- NZD/EUR: 0.5800 - 0.6000 ▼
- GBP/NZD: 1.9700 - 1.9900 ▲
- AUD/NZD: 1.0600 - 1.0800 ▲
- NZD/CAD: 0.8600 - 0.8800 ▲