- NZD/USD remains on the defensive around 0.6110 in Monday’s early Asian session.
- New Zealand’s Trade Balance arrived at NZD $-10.05B YoY in May from the previous reading of $-10.22B. A
- The RBNZ’s hawkish bias could limit the downside for the Kiwi.
The NZD/USD pair extends the downside near 0.6110 on Monday during the early Asian trading hours. New Zealand has been the weakest currency in this session amid the lack of catalysts. Meanwhile, the stronger US Dollar (USD) after the encouraging US Purchasing Managers Index (PMI) data might weigh on the NZD/USD for the time being.
Data released from Statistics New Zealand on Monday showed that New Zealand’s Trade Balance arrived at NZD $-10.05B YoY in May from the previous reading of $-10.22B. Additionally, Exports rose to $7.16B in the same month versus $6.31B prior whereas Imports increased to $6.95B in May compared to $6.32B in April.
The Reserve Bank of New Zealand (RBNZ) forecast during its last policy meeting in May that the central bank wouldn’t start cutting its Official Cash Rate from 5.5% until the third quarter of next year. Nonetheless, many analysts expect the beginning of the rate cut in early 2025
US business activity expanded in June at the fastest pace in more than two years, according to the S&P surveys released on Friday. The flash US S&P Composite PMI climbed to 54.6 in June from a final reading of 54.5 in May. The Manufacturing PMI rose to 51.7 in the same reported period from 51.3 in May and was stronger than the expected 51. The Services PMI improved to 55.1 in June from 54.8 prior, beating the estimation of 53.7. The Greenback gains ground after stronger US PMI data.
Meanwhile, Federal Reserve (Fed) officials remain cautious, emphasizing that the central bank needs to see more progress on inflation before considering a rate cut. The market continues to price in nearly 65% chance of a cut in September, according to CME FedWatch Tool. The higher-for-longer US rate narrative continues to underpin the US Dollar (USD) in the near term against the New Zealand Dollar (NZD).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD hovers near 1.0700 ahead of key US PCE inflation
EUR/USD is trading sideways near .0700 in the European session on Friday. The pair reverses the previous rebound amid resurgent US Dollar demand even as risk sentiment remains in a sweeter spot. Markets turn anxious ahead of US PCE inflation and Sunday's French elections.
GBP/USD stays defensive below 1.2650, awaits US PCE data
GBP/USD stays on the back foot below 1.2650 in European trading on Friday. Traders ignore the upward revision to the UK Q1 GDP data, refraining from placing any directional bets ahead of the key US PCE inflation data.
Gold could witness volatility after release of PCE inflation data
Gold (XAU/USD) edges marginally lower, trading in the $2,320s on Friday, ahead of the main economic data event for the week, the US Personal Consumption Expenditures (PCE) – Price Index for May.
BTC struggles around the $62,000 level
Bitcoin price faces pullback resistance at the lower band of the descending wedge around $62,000. Ethereum price finds support at $3,288, the 61.8% Fibonacci retracement level. Ripple price faces resistance at $0.500, its daily resistance level.
US core PCE inflation set to slow as markets mull Federal Reserve rate cut bets for September
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.1% on a monthly basis in May.