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Financial markets ended last week on a weaker note, with global equity markets down, global interest rates up, and commodity prices falling. The yield on the US 10-year bond increased by 3.7 bps to 4.24%.
Joe Biden announced he’s withdrawing from the 2024 election and endorsing Kamala Harris. It’s unclear what this means for currencies. Currently the levels are pretty much unchanged.
NZDUSD ended the week at its lowest level in 2-months, around 0.6010. The current technical analysis appears weak for NZD, with some potential support at 0.6000. However, there is also a possibility of it dropping to just below 0.5900, which was its lowest point in April. The declining risk appetite among investors and the RBNZ’s recent shift towards a more dovish (cautious) monetary policy are contributing to the challenges facing the NZD. With limited data releases early in the week, attention will be on US equities to see if they rebound from last week’s movements.
NZDAUD closed at 0.8990, its lowest weekly close since October 2022. As mentioned in my last week’s report, there may be some consolidation in the 0.8950-0.9050 range as we await more data.
NZDJPY is back again at 94.75 after some notable fluctuations on last Wednesday. USDJPY settled down by the week’s end at 157.40. Japan’s inflation rate remained steady at 2.8%, exceeding the 2% target for 27 months in a row. This persistent above-target inflation, combined with rising wages, suggests that the Bank of Japan (BoJ) no longer has a solid reason to keep its very relaxed monetary policy. If the BoJ doesn’t start tightening its policy soon, there could be concerns about its independence. The next possible time for the BoJ to adjust its policy is at the end of the month.
NZDGBP ended at an 11-month low, just above 0.4650. June’s UK retail sales were also weaker than anticipated, with spending volumes, excluding autos, dropping by 1.5% month-on-month, possibly due to poor summer weather.
The economic calendar today features mainly secondary data, including NZ trade data at 10:45 am, Euro area consumer confidence, and US existing home sales. Looks like a pretty quiet week on the data front, with the highlights being global PMIs, US Q2 GDP, and US PCE deflator data.
Here are the latest mid-market rates:
| Currency Pair | Mid-market rate |
| NZD/USD | 0.6010 |
| NZD/AUD | 0.8988 |
| NZD/JPY | 94.68 |
| NZD/CNY | 4.3761 |
| NZD/EUR | 0.5521 |
| NZD/GBP | 0.4652 |
| NZD/HKD | 4.6921 |
| NZD/SGD | 0.8080 |
NZD/USD 24 HOURS
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