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Kiwi recovers ground following positive GDT dairy auction

NZD - New Zealand Dollar

The New Zealand Dollar moved positively on Wednesday morning as it continued its march higher following a strong global demand for milk supply. With the latest release at the GDT Auctions showing a 0.8% rise, the local currency moved in tandem seeing the NZD/USD rally from 0.6840 on open to overnight highs of 69 US cents.

A positive reading of 1.4% for ANZ Commodity Prices for the month of March during Wednesday afternoon with dairy the main contributor saw the Kiwi continue its momentum higher into offshore trading.

Positive releases for retail sales and trade balance figures across the Tasman saw the AUD/NZD reach its highest levels of 1.0490 in three weeks as the cross continues its positive trend since the RBNZ changed its stance to a dovish bias.
From a technical perspective, the NZD/USD pair is currently trading at 0.6775. We continue to expect support to hold on moves approaching 0.6740 while now any upward push will likely meet resistance around 0.6840.

Key Movers

The Great British Pound moved lower with some macroeconomic news to report on for a change. A weaker than expected Services PMI reading of 48.9 saw the GBP/USD test support levels at the phycological mark at the 1.30 handle. Cable then recovered ground to 1.3150 and finish higher for the day as PM Theresa May outlined her alternative approach to Brexit. Further delays are expected to be seen as May looks to come to a workable agreement with the Labour party to win a majority in the commons.

News overnight in China has been positive towards finalising a trade agreement between the United States and China as the South China Morning Post reports that trade talks are 90% concluded with the hope of finalising a deal in the next week. Further meetings continue today in Washington with the news sparking the US Dollar higher. The DXY at one stage reached 97.50 and three-week highs.

On the agenda today is the release of ECB Monetary Policy Meeting Accounts as investors look for any clues as to whether there is expected to be additional measures to stimulate the economy following the ECB’s announcement at its latest meeting to start its third long term refinancing operation (TLRO).

Expected Ranges

NZD/USD: 0.6740 - 0.6840 ▲

NZD/AUD: 0.9480 - 0.9570 ▼

GBP/NZD: 1.9200 - 1.9600 ▼

NZD/EUR: 0.6000 - 0.6080 ▲

NZD/CAD: 0.9000 - 0.9100 ▲