New Zealand dollar falters against key counterparts
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Daily Currency Update
The New Zealand dollar benefited from a weaker USD on Monday, edging back toward US$0.6130, while softening against other major counterparts. With little of note on the domestic docket price action was well contained. A contraction in US treasury yields and a retracement in US equities dampened demand for the US dollar, allowing the NZD to climb off intraday lows below US$0.6110, to mark session highs just short of US$0.6140.While advancing against the USD, the NZD is lower against a stronger euro and GBP, sliding toward 0.57 and 0.4820 respectively, while giving up AU$0.92 against the Australian dollar and marking intraday lows at AU$0.9176. The New Zealand dollar outperformed through May and early June and it appears markets are now paring gains and absorbing profits ahead of more central bank policy guidance.
Our attention today turns to US consumer confidence and manufacturing data, Australian consumer confidence numbers and a Canadian inflation report.
Key Movers
Price action across major currencies was largely subdued through trade on Monday, yet there were still clear winners and losers to start the week. The euro and GBP both edged higher buoyed by a contraction in French Political risk. Comments from National Rally party leader Bardella helped alleviate fears a far-right win would undermine the French economy. Bardella sought to convince voters that they are ready to bring the country's budget and economy back to reason.European yields rallied, led by France's CAC 40 up over 1%, while Germany’s DAC rallied 0.9% and the euro finished above 1.0730, up 0.4%. With Europe on the front foot, US equities retreated led by Nvidia and a broad IT pullback. The S&P 500 and Nasdaq both closed lower, while US yields closed down 1% forcing the DXY index to shift lower to start the week.
While lower against the euro, pound and antipodean currencies, the USD continues to close in on 160 against the yen. The likelihood of interventions is again increasing after the Bank of Japan failed to provide any guidance as to the timing and trajectory of quantitative easing.
Our attention today turns to commentary from ECB officials, Canadian CPI inflation data and US manufacturing and consumer confidence data.
Expected Ranges
- NZD/USD: 0.6080 - 0.6180 ▲
- NZD/EUR: 0.5680 - 0.5750 ▼
- GBP/NZD: 2.0650 - 2.0850 ▲
- NZD/AUD: 0.9150 - 0.9250 ▼
- NZD/CAD: 0.8300 - 0.8400 ▼