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New Zealand dollar extends gains four days in a row

NZD - New Zealand Dollar

The New Zealand dollar has continued to strengthen four days in a row against the Greenback touching a high of 0.6595 overnight. The recent rally was supported by the Federal Reserve softening their stance on Wednesday and also local NZ GDP data that did not disappoint. New Zealand’s economy grew in line with forecasts in the first three months of 2019 by 0.6% quarter on quarter thanks to an uptick in construction that offset slower growth in services. The service sector industries however, which makes up two-thirds of the economy recorded the slowest growth in 7 years rising a small 0.2%.

From a technical perspective, the Kiwi is currently trading at 0.6585. We continue to expect support to hold on moves approaching 65 US cents while any upward push will likely meet resistance at 0.6595 and 0.6610.

Key Movers

US dollar extended its decline on Thursday against most majors, GBP/USD rose 0.5% on the day and EUR/USD added 0.6% over the day. US equities hit record highs with the S&P 500 stock index closing at an all-time high on Thursday, following the Federal Reserve's announcement on Wednesday that it would consider cutting interest rates to keep the economy in expansion mode.

US data Philly Fed Manufacturing Index tumbled to 0.3 after registering a four-month high of 16.6 in the prior month. The report follows a disappointing regional manufacturing report from the New York area as well, after the Empire State Manufacturing survey earlier this week also registered a steep drop.

Over in the UK, the Bank of England kept rates steady at 0.75% and has cut the growth outlook saying it expects economic growth to be flat in the second quarter of the year. The committee said the downgrade in part reflected an easing of stock-building ahead of Brexit deadlines.

Expected Ranges

NZD/USD: 0.6520 - 0.6640 ▲

NZD/AUD: 0.9470 - 0.9540 ▼

GBP/NZD: 1.9200 - 1.9500 ▲

NZD/EUR: 0.5780 - 0.5880 ▲

NZD/CAD: 0.8580 - 0.8750 ▼