NZD unable to sustain uptick, tracking sideways to start the week
Tuesday 5 July, 2022
Daily Currency UpdateThe New Zealand dollar tracked sideways through trade on Monday, unable to capitalise on the broader uptick enjoyed across commodity currencies. With little of note on the domestic ticket the NZD bounced between 0.6195 and 0.6220 through the domestic session before gathering some upward momentum leading into overnight trade. Reports president Biden will look to roll back tariffs on Key Chinese exports helped support a move toward 0.6250, but alas the NZD was unable to hold onto gains and has since retreated back to 0.62. Having broken supports at 0.6220 we are now eyeing a consolidated break below 0.6170 as a signal the bearish downtrend is still intact. The NZD remains under sustained pressure in the face of rising fears for the global growth outlook. Our attentions today turn to the NZIER quarterly survey of business opinion and conditions. Corporate confidence in NZ has deteriorated through 2022 and we expect a optimism will have waned further through Q2. Outside monitoring performance against the USD we are eyeing the RBA policy statement. A 50 basis point uptick coupled with clear guidance on future hikes could force the NZD back below 0.90 against the AUD.
Key MoversWith US markets closed for 4th of July celebrations price action across major currencies was largely muted. Commodity currencies outperformed with the Canadian Dollar and Norwegian Kroner heading the leaderboard. The Euro struggled to find any real direction tracking between 1.0420 and 1.0460 despite a notable lift in European bond yields. Ongoing hawkish commentary for ECB policy makers has helped undo last weeks massive fall, as markets price in an aggressive shift in Monetary policy. Having staved off moves approaching parity the Euro should remain well supported on move approaching this handle as Fed and ECB guidance move closer. The GBP opens largely unchanged as well, unable to maintain a break back above 1.2150, while the Yen was the worst performer on the day giving up 0.4% and allowing the USD to mark intraday highs at 135.70. With little of note on today’s ticket we expect ranges will remain largely unchanged, although returning US investors could prompt some volatility as they square positions after the long weekend. Our focus remains on Thursday’s FOMC meeting minutes and Friday’s Non-Farm Payroll update.
- NZD/USD: 0.6170 - 0.6250 ▲
- NZD/EUR: 0.5920 - 0.6020 ▲
- GBP/NZD: 1.9380 - 1.9580 ▼
- NZD/AUD: 0.8980 - 0.9120 ▼
- NZD/CAD: 0.7930 - 0.8030 ▼