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NZDUSD rebounded from 0.6090 and ended the week above 0.6100 as the US DXY (dollar index) dropped 0.3% to 104.75. The USD weakened, US equities ended the week positively, and the bond yields were relatively stable with the US 10-year yield dropped 1bp to 4.47%. The final May consumer confidence index from the University of Michigan rose to 69.1 from the preliminary reading of 67.4. Recent declines in gasoline prices may have boosted consumer sentiment and likely contributed to the decrease in inflation expectations. The 1-year inflation expectation from UoM (University of Michigan) came in at 3.3%, down from the preliminary estimate of 3.5%. The current NZDUSD support level sits at 0.6100 & 0.6084 and resistance around 0.6150 and 0.6170.
NZDAUD remains strong due to the more hawkish stance of the RBNZ, rather than underlying economic factors. The RBNZ’s struggle with inflation and talks of prolonged higher rates compared to the AUD are key drivers. However, upcoming government budget restraints could affect this trend later in the week. In the short term, resistance sits at the 200-day moving average of 0.9254, with support around 0.9200-0.9220.
This week starts with holidays in the US (Memorial Day) and UK (Spring Bank Holiday). Australia’s retail sales will be out on Tuesday, followed by their CPI data on Wednesday. In New Zealand, we have business confidence and building permits data. The main event is inaugural budget on Thursday at 2:00pm NZT. On Thursday night we’ll see the release of US GDP data for Q1 along with a series of speeches from Fed officials, including Bostic discussing the economy, and to end the week, the US PCE (Personal Consumption Expenditure) data on Saturday is highly anticipated, with the market expecting a m/m decline in the core measure from 0.3% to 0.2%.
Here are the latest mid-market rates:
| Currency Pair | Mid-market rate |
| NZD/USD | 0.6124 |
| NZD/AUD | 0.9231 |
| NZD/JPY | 96.08 |
| NZD/CNY | 4.4462 |
| NZD/EUR | 0.5643 |
| NZD/GBP | 0.4805 |
| NZD/HKD | 4.7797 |
| NZD/SGD | 0.8259 |
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