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Kiwi dollar consolidates around 0.7050

NZD - New Zealand Dollar

The New Zealand dollar finished another week with gains beyond 0.71 US cents against the Greenback. After rising to its highest level since April 2018 at 0.7105 on Thursday, the NZD/USD pair closed virtually unchanged and started to edge lower on Friday. The New Zealand dollar last week traded between 0.7011 and 0.7105 spurred on by a positive shift in demand for risk, amid hopes a vaccine. On the data front on Friday we saw the release of monthly Building Consents which saw for the month of October the seasonally adjusted number of new dwellings consented rose 8.8 percent, after rising 3.6 percent in September. While the overseas trade index showed Lower export prices for dairy, meat, and logs in the September quarter led to the biggest drop in terms of trade since June 2009. The third largest fall in NZ export prices since the series began. Looking ahead this week and the calendar in New Zealand is quite light with quarterly Manufacturing Sales on Wednesday and monthly Food Price Index (FPI) on Friday. From a technical perspective, the NZD/USD pair is currently trading at 0.7048. We continue to expect support to hold on moves approaching 0.7010 while now any upward push will likely meet resistance around 0.7100.

Key Movers

The Greenback rose from 2-1/2-year lows on Friday as European Union and British negotiators decided to put talks on hold, after failing to narrow differences sufficiently to reach a trade agreement, for a post-Brexit trade deal. As a result the Pound Sterling fell 0.2% against the Greenback to $1.3424. The greenback however still posted its worst week in a month after investors shrugged off a weaker-than-expected U.S. employment report and upbeat announcements on COVID-19 vaccines have helped drive a rally in riskier currencies at the expense of the safe-haven dollar. On Friday we saw the release of U.S. non-farm payrolls increased by 245,000 jobs last month after rising by 610,000 in October. That was the smallest gain since the jobs recovery started in May. The US has quite a light calendar this week, as the country will publish the December Michigan Consumer Sentiment Index´s preliminary estimate and the final readings of its November inflation figures.

Expected Ranges

NZD/USD: 0.7000 - 0.7100 ▼

NZD/EUR: 0.5750 - 0.5850 ▼

GBP/NZD: 1.8800 - 1.9000 ▼

NZD/AUD: 0.9360 - 0.9460 ▼

NZD/CAD: 0.8920 - 0.9120 ▼