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US equities surged overnight, supported by strong performance in the tech sector. A weaker than expected US Retail Sales report supported US Treasuries with the US 10-year yield dropping 6 bps to 4.22% and weakening the USD, reversing its earlier gains. Lower US bond yields are not benefiting the USD, political issues in Europe are also developing and adding to the uncertainty. US Retail Sales data for May was weaker than expected, increasing by just 0.1% m/m compared to the anticipated 0.3%. Additionally, April’s data was revised downward from flat to a -0.2% decline. Control group sales rose by 0.4% in May, slightly below the expected 0.5%. Out of 13 retail sales categories, five showed declines, while spending increased in the other eight categories. Notably, gasoline spending fell by 2.2%, furniture and home furnishing sales dropped by 1.1%, and building materials and garden equipment sales decreased by 0.8%. This suggests that consumers are adjusting their spending due to tight monetary conditions.
NZDUSD bounced back to 0.6140 after testing the 0.6100 level following the local market close. NZD is up this morning because of the stronger Australian dollar, which has regained favour following yesterday’s unexpectedly hawkish RBA statement. Today’s focus will be on Q1 current account data, historically significant for currency markets and it is expected to demonstrate continued improvement in reducing the deficit, supported by economic recovery. The next important resistance level sits at 0.6175 and a support is still at 0.6100.
AUDUSD has risen above 0.6650. It has continued to strength overnight, buoyed by the positive response to a more hawkish RBA stance, with New Zealand dollar also benefiting from this momentum. Meanwhile, the NZDAUD pair is slightly lower at 0.9230.
Scheduled for today includes a speech by RBNZ Chief Economist Conway discussing the path to achieve 2% inflation. Additionally, there will be the release of New Zealand’s Q1 Current Account Data and later in the evening, UK CPI data will be published.
| Currency Pair | Mid-market rate |
| NZD/USD | 0.6143 |
| NZD/AUD | 0.9224 |
| NZD/JPY | 96.98 |
| NZD/CNY | 4.4657 |
| NZD/EUR | 0.5719 |
| NZD/GBP | 0.4832 |
| NZD/HKD | 4.7922 |
| NZD/SGD | 0.8292 |
Here are the latest mid-market rates:
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