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Kiwi dollar gains on greenback weakness

NZD - New Zealand Dollar

The Kiwi dollar is stronger this morning when valued against the Greenback opening at 0.6620 (0.5% up from last week’s close). On the data front yesterday we saw the release of monthly Credit Card Spending which came in up 6.6% (previously 4.5%). Looking ahead today and we will see monthly Trade Balance data forecast 200M vs. previous 433M. All eyes for the remainder of the week will be on Wednesday’s Reserve Bank of New Zealand (RBNZ) interest rate decision and monetary policy statement. The RBNZ is expected to leave rates unchanged at this meeting, but it’s likely to hint at an August rate cut. On Thursday we will see the release of ANZ Business Confidence.

From a technical perspective, the NZD/USD pair is currently trading at 0.6618. We continue to expect support to hold on moves approaching 0.6580 while now any upward push will likely meet resistance around 0.6630.

Key Movers

The Greenback softened against a basket of currencies on Monday on bets the U.S. Federal Reserve may lower interest rates more than once this year. Interest rates futures implied traders priced in a 100% chance the Fed would cut rates at the end of July, while they are betting on a high probability it might lower rates two more times after that. All eyes this week will be on the outcome of the Xi-Trump meeting at the G20 summit at the end of the week (June 28-29). The USD continues to drift lower, with the commodity currencies showing some of the best, albeit moderate gains.

The Pound Sterling hovered just off one-month highs reached earlier on Monday against the dollar. This week GBP/USD pair continues to trade in the recent familiar range between 1.2750 and 1.2550, now closer to the upper limit, benefiting significantly from the weaker US dollar. Looking ahead this week in the UK and today we will see the release of the CBI retail survey for the month of June, on Wednesday the Bank of England’s Governor Carney and members of the Monetary Policy Committee will testify on inflation and economic outlook before the Parliament’s Treasury Committee. From a technical perspective, the GBP/USD pair is currently trading at 1.2735. We continue to expect support to hold on moves approaching 1.2710 while now any upward push will likely meet resistance around 1.2760.

Expected Ranges

NZD/USD: 0.6575 - 0.6675 ▲

NZD/AUD: 0.9400 - 0.9600 ▲

GBP/NZD: 1.9100 - 1.9300 ▼

NZD/EUR: 0.5700 - 0.5900 ▲

NZD/CAD: 0.8675 - 0.8775 ▲