Kiwi eyes off 0.66 handle due to buoyant risk appetite
Daily Currency UpdateThe New Zealand dollar is little changed against the Greenback opening this morning around 0.6577. The Kiwi dollar remains close to its highest level since January, and towards the top of the 0.62 – 0.66 trading range. Last week the Kiwi rose 0.7% last week, mainly due to buoyant risk appetite (rising equity markets) and a stronger CNY. Listed technology stocks in US equity markets continued through last week, surprising many, and raising concerns about the sustainability of the recovery rally since April. On Wednesday last week the Kiwi tested the major technical/chart resistance point at 0.6600 when whole milk powder dairy commodity prices jumped up by 14%.
Looking ahead this week and on Monday we will see the release of Food Price Index (FPI) for the month of June. On Tuesday we will see the release of monthly Visitor Arrivals. However all eyes this week will be on Thursday’s Consumer Price Index (CPI) which is expected to come in at -0.5%. On Friday to close out the week we will see the release of Business NZ Manufacturing Index. From a technical perspective, the AUD/USD pair is currently trading at 0.6956. We continue to expect support to hold on moves approaching 0.6923 while now any upward push will likely meet resistance around 0.6992.
Key MoversThe dollar slipped on Friday on hopes of a potential vaccine for COVID-19 that outweighed concerns about the surge in infections in the United States and around the world. The main market-moving news on Friday was Gilead’s report on its phase three clinical trials of Remdesivir. Gilead said that the drug cut the death rate of those in its trials by 62%. Over the weekend it was reported the state of Florida set a new record with over 15,000 new COVID-19 cases. Coronavirus infections are rising in about 40 states. Over the last week the United States has broken global records by registering approximately 60,000 new cases a day for the last four days in a row. On the release front on Friday U.S. producer prices unexpectedly fell 0.2% in June, following a 0.4% rebound in May, as the economy battles depressed demand amid the COVID-19 pandemic.
- NZD/USD: 0.6380 - 0.6600 ▼
- NZD/EUR: 0.5780 - 0.5850 ▲
- GBP/NZD: 1.9080 - 1.9320 ▲
- NZD/AUD: 0.9390 - 0.9460 ▲
- NZD/CAD: 0.8850 - 0.8950 ▲