NZD range bound as trade headlines sideline moves
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Daily Currency Update
The New Zealand dollar held a narrow range on Friday, consolidating its rebound back above U$0.60. After the USD DXY index hits its lowest level in over 36 months on Thursday price action through trade on Friday was much more subdued with moves among majors currencies well contained. Having broken back above US$0.60 the NZD bounced between US$0.6030 and US$0.6070 settling toward the middle of the range near US$0.6050 leading into the weekly close. Renewed trade uncertainty prompted whippy price action as details of a US/China trade framework were contrast against reports US/Canada trade talks had been suspended. While the CAD was the weakest of the majors the NZD opens this morning little changed.On the local front, consumer confidence improved in June yet remains subdued as household spending and increased inflation expectations dampen sentiment. With Trade and geo-political tensions continuing to dominate direction we look to employment indicators and business confidence data for direction during the local session while China PMI numbers and Commentary from ECB and Fed policy makers dominate the offshore ticket.
Key Movers
Price action across majors was somewhat subdued Friday as markets took a step back after the USD dollar index crashed to its lowest level since February 2022 on Thursday. The Canadian dollar was the days worst performer pitching lower after President Trump abruptly abandoned trade negotiations in response to the planned implementation of a digital services tax, a tax that would directly hit American companies. Equities and risk assets whipped about as headlines filtered through. Reports the US and China had agreed a new trade Framework helped bolster risk demand yet with the July 9 deadline approaching we expect trade uncertainties will continue to dominate direction. President Trump has indicated letters will be sent over the next 10 days to trading partner informing them of their new tariff status while treasury Secretary Scott Bessent suggest an extension to Labor Day (September 1) is likely. With EU, Japanese and Indian trade delegations all expecting to broker deals before the deadline markets remain confident a sensible baseline tariff agenda will be achieved.In other news the US senate voted on Saturday to advance President Trumps Big Beautiful Bill act, clearing the way for the vote to pass the Senate today. That said the weekend’s majority was razor thin and its passage is not guaranteed.
Our attentions remain affixed to US politics, geo-political tensions and trade headlines as the major movers to start the new week.
Expected Ranges
- NZD/USD: 0.5980 - 0.6080 ▲
- NZD/EUR: 0.5100 - 0.5200 ▼
- GBP/NZD: 2.2500 - 2.2800 ▼
- NZD/AUD: 0.9200 - 0.9300 ▼
- NZD/CAD: 0.8220 - 0.8350 ▲