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Kiwi tests support levels at 67 US cents

NZD - New Zealand Dollar

The New Zealand Dollar was steady in its movements on Wednesday trading in a 25-point range for the day. Opening at 67 US cents, the Kiwi moved little following a positive Trade Balance release, seeing a surplus of $365m for the month of June. Greenback sellers were in force overnight as Flash Manufacturing PMI slowed to a 10 year low pushing the local currency to highs of 0.6723.

Little movement is excepted domestically today as investors focus on the latest ECB interest rate decision and Core Durable Goods Orders print due for release this evening. From a technical perspective, the Kiwi is currently trading flat at 67 US cents. We continue to expect support to hold on moves approaching 0.6620 while any upward push will likely meet resistance at 0.6760.

Key Movers

The US Dollar was flat overnight as traders took a breather as they look to position themselves ahead of next weeks Federal Reserve interest rate decision. The US Dollar Index (DXY) was flat following its 1 cent rally this week as traders lowered their expectations that the FOMC would cut by 50 bps. Pulling off from highs overnight of 97.81 to 97.68 on open this morning, the greenback was hampered by a poor Flash Manufacturing PMI reading which expanded at its slowest pace in 10 years. Offsetting this release was growth in the service sector where the majority of Americans are employed.

The Great British Pound was one of the better performers overnight against G10 currencies as Boris Johnson was elected as Tory leader and becoming third Prime Minister of the UK in three years. Hoping to restore confidence for the local economy and lead a path to a favourable Brexit decision, markets reacted positively to the news, rallying to overnight highs of 1.1220 against the Euro and 1.2520 against the Greenback.

The Euro continued to see pressure ahead of this evenings ECB Policy meeting as speculation is rife that ECB President Mario Draghi will likely announce more aggressive policy stimulus to boost lagging inflation and growth forecasts. The EUR/USD cross has declined from July 19th highs of 1.1280 to open this morning at 1.1142.

Expected Ranges

NZD/AUD: 0.9550 - 0.9650 ▲

NZD/CAD: 0.8750 - 0.8850 ▲

NZD/EUR: 0.5980 - 0.6050 ▲

GBP/NZD: 1.8400 - 1.8800 ▲

NZD/USD: 0.6660 - 0.6740 ▲