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New Zealand Dollar just shy of 66c vs the Greenback

NZD - New Zealand Dollar

The domestic docket did little to excite investors in the absence of any local data, as such the New Zealand Dollar seesawed its way through Friday’s day of trade. Having peered its head just above the 66c mark during Asian trade the NZD/USD lost around 50-pips through the European session touching a low of 0.6554. Thanks mainly to poor US data and a lack of follow-through in equities the pair found itself gathering momentum and closing the week at 0.6585.

The macroeconomic calendar is pretty light this week, today we have Credit Card spending due out at 11am local time. Markets will be squarely focused on the RBNZ’s rate decision on Wednesday. The central bank cut the rate by 0.25% in May to a record low of 1.5% and did leave the door open for more cuts. We see the market currently pricing in around a 20% chance of a cut this week and about 80% for a cut next month.

Key Movers

The U.S. Dollar index was down on Friday following rising tensions between the U.S. and Iran and also weaker than expected PMI data which increased support for the Fed to cut rates next month. IHS Markit said its flash U.S. manufacturing Purchasing Managers Index for June declined to a reading 50.1, down from May’s reading of 50.5. Economists were expecting to see a reading of 50.5. At the same time, the firm’s service sector PMI reading dropped to 50.7, down from May’s reading of 50.9 but relatively in line with expectations. According to the report, sentiment within the manufacturing sector is at its lowest point in 117 months.

EUR/USD moved higher gaining 0.6% and the GBP/USD recouped all losses from earlier in the session closing at 1.2740. Wall Street also opened lower as U.S. President Donald Trump said via Twitter that he had come within minutes of firing missiles at Iran in response to it shooting down a surveillance drone.

Expected Ranges

NZD/USD: 0.6510 - 0.6680 ▲

NZD/AUD: 0.9480 - 0.9600 ▲

GBP/NZD: 1.9220 - 1.9500 ▲

NZD/EUR: 0.5780 - 0.5840 ▼

NZD/CAD: 0.8640 - 0.8740 ▼