NZD - New Zealand Dollar
The New Zealand dollar offered little to excite investors through trade on Friday, struggling to break beyond resistance at 0.6430 while maintaining support on breaks below 0.64. With little of note on the macroeconomic calendar the NZD remained vulnerable to two-way risk driven by US-China trade talks and headlines. An underlying nervousness and general lack of investor conviction have hampered volatility and cross asset fluctuations meaning broader swings have been largely muted through the past 7 days.
Attentions now turn to retail rales data, the RBNZ financial stability report, commentary from RBNZ governor Orr and an ANZ business confidence report as drivers of domestic direction throughout the week ahead. With plenty of macroeconomic data on hand and ongoing US-China trade negotiations governing risk demand we would expect a little more price action with hawkish RBNZ commentary and upbeat data sets opening the door for short term upside and a test of resistance at 0.6450.
Price action for USD this week will be hampered by Thursday Thanksgiving holiday and long weekend. While the back and forth between trade delegates drives direction we could see some increased volatility in thin trading lines come the end of the week, especially if key inflation date due Wednesday misses the mark. Watch for fluctuation in USD/JPY on the back of risk trends.
Sterling remains beholden to election and subsequent Brexit outcomes, finding support through the end of last week as Johnson’s conservative look further cement their lead in the polls. Opening this morning just below 1.29 we anticipate the GBP will fluctuate between 1.27 and 1.31 in the lead up to the December 12th election.
The Euro could test the lower end of recent ranges this week having missed on key manufacturing PMI data last week. With little offered from new ECB head Christine Lagarde in her maiden address we can only expect the ECB will maintain it current path of QE and accommodative monetary policy as concerns lacklustre growth and stagnant inflation will require persistent and ongoing stimulus. A break below the psychological 1.10 mark could signal a downturn and move toward 1.0950.
0.6360 - 0.6450 ▼NZD/EUR:
0.5775 - 0.5850 ▲GBP/NZD:
1.990 - 2.0200 ▼NZD/AUD:
0.9390 - 0.9480 ▲NZD/CAD:
0.8450 - 0.8580 ▼