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New Zealand dollar steady ahead of NZ manufacturing data

NZD - New Zealand Dollar

The New Zealand dollar has remained firm following the second day of Testimony from the US Federal Reserve. Comments from Chairman Jerome Powell raised expectations that the central bank will cut rates at its next meeting which saw the NZD/USD touch a high of 0.6689 overnight and has settled this morning around the 0.6626 levels.

Meanwhile, on the data front, Statistics New Zealand reported yesterday that total credit card spending for June was flat, spending on furniture, hardware and appliances offset a drop in spending less on fuel which coincides with a drop in fuel prices in June. In actual terms, retail spending on electronic cards totalled $5.1 billion in June, up 1.1%, or $57 million, from the same month a year ago.

Looking ahead, today sees the release of Business NZ Manufacturing Index where economists have predicted a recovery from 50.2 to 53.1. We can expect to see immediate support around 0.6640, a break through this will then see the pair carry towards 0.6600. On the upside, resistance is seen at 0.6690 and 0.6720.

Key Movers

The US Dollar Index which measures the strength of the Greenback against a basket of six major currencies inched lower as Powell said the central bank will “act as appropriate”. Testifying for a second day before congress, he said the bank is prepared to cut rates to support the economy which has raised hopes the first cut could happen as early as this month. Adding that "Uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook”.

In the UK, the GBP/USD gained news polls report that 77% of Conservative members have already voted for who they want to become the next Prime Minister and 72% of 200k members have backed Boris over Mr Jeremy Hunt. The winner is expected to be announced on July 23.

Expected Ranges

NZD/USD: 0.6600 - 0.6720 ▲

NZD/AUD: 0.9520 - 0.9610 ▲

GBP/NZD: 1.8680 - 1.8960 ▼

NZD/EUR: 0.5880 - 0.5980 ▲

NZD/CAD: 0.8650 - 0.8750 ▼