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Kiwi stumbles but holds onto gains above 0.72

NZD - New Zealand Dollar

The Kiwi was among the top performers for the week but did have a Friday it would rather forget. Initially, the Kiwi bottomed to 0.7212 on Friday as the Greenback surged but managed to rebound late in the session to open this morning at 0.7247. Encouragingly, the Kiwi was able to hold onto most of its weekly gains supported by the RBNZ meeting earlier in the week. Nevertheless, the Kiwi did record a fall of 0.67% for the day.

The news of the week domestically was the RBNZ's hawkish statement in the Monetary Policy Statement. Their plan to increase interest rates as early as the second half of 2022 led the Kiwi to challenge the 0.73 level and gain 0.47% for the week. With little else to digest, the market turned offshore for direction with Friday's movements being driven primarily by the US Dollar.

Moving into the first week of June, all eyes turn to US employment data for direction as well as the RBA Policy statement on Wednesday.

Key Movers

Currency markets were relatively quiet on Friday but the Greenback did enjoy some significant movements in a few major pairs. The Greenback recorded a 0.37% increase against the Aussie, a 0.33% increase against the Swiss Franc and a 0.63% increase against the Kiwi. Overall however, the market was relatively flat with the US Dollar only recording a 0.09% increase against a basket of currencies on the US Dollar Index (DXY) to open this morning at 90.06. Nevertheless, the DXY enjoyed significant momentum throughout the day to even reach as high as 90.4 before falling back towards the Friday close. Bolstered by domestic data, the US Dollar saw PCE US inflation figures rise 3.6% on a year to April and 3.1% for Core PCE, its highest readings since 1994. Despite the positive reading, US Dollar gains were tempered as risk-on sentiment permeated markets and US economic outperformance is already almost entirely priced into USD evaluations.

Expected Ranges

NZD/AUD: 0.9340 - 0.9453 ▲

NZD/CAD: 0.8701 - 0.8805 ▼

NZD/EUR: 0.5907 - 0.5979 ▲

GBP/NZD: 1.9448 - 1.9683 ▲

NZD/USD: 0.7204 - 0.7291 ▲