New Zealand dollar range bound ahead of U.S non-farm payrolls
Friday 5 July, 2019
Daily Currency UpdateIn the absence of any local data on Thursday the New Zealand dollar flirted within a tight range yesterday moving between a low of 0.6707 and a high of 0.6720. Interestingly with the NZD/USD being closely correlated to the AUD/USD the Kiwi jumped 10 pips at the same time the AUD/USD did on the back of Australian Retail Sales data. However, during the European session the pair reversed some of it’s gains and has slipped back under 67c. There are no scheduled releases locally today, tonight investors will be focused on US data which will see the release of government non-farm payrolls report for June along with wage growth and unemployment figures. A weak payroll outcome would certainly bolster the case for a rate cut from the Federal Reserve, particularly given the data follows a poor result in May. Adopting a technical viewpoint, we see initial NZD/USD support at 0.6660 on the downside followed by 0.6630. On the topside, a sustained move above 0.6700 will indicate some buying activity and if there is enough upside momentum then look to a rally towards 0.6740.
Key MoversUS markets were closed yesterday observing July 4th US independence day so markets were fairly contained and there’s not a great deal to report on overnight market news. EUR/USD moved sideways between 1.1270 and 1.1295 and we saw Retail Sales for the Eurozone fall 0.3% for the month of May, this was the second consecutive fall, and highlights ongoing weakness in the euro zone economy. ECB Governing Council member and Finnish central bank governor Olli Rehn has said that “we should no longer see the recent slowdown in growth as a brief temporary dip in the economy, as a ‘soft patch’”. Adding “We are experiencing a longer phase of weaker growth”. He called on action by the ECB saying, “If we really want to live up to our mandate, further monetary stimulus is now needed until there is improvement in economic and inflation prospects”. GBP/USD relatively flat trading between 1.2568 and 1.2591. Reports say if Boris Johnson does become the next Prime Minister and leads the UK out of the EU with a no-deal the Sterling will likely fall to 2 year lows against the Greenback.
- NZD/USD: 0.6660 - 0.6740 ▲
- NZD/AUD: 0.9470 - 0.9580 ▼
- GBP/NZD: 1.8700 - 1.8900 ▼
- NZD/EUR: 0.5870 - 0.6000 ▲
- NZD/CAD: 0.8660 - 0.8800 ▼