NZD/USD climbs to 2-week highs above 0.66 as USD struggles to find demand
- Credit card spending in NZ expanded more than expected in May.
- Greenback stays under pressure as investors price rate cuts.
- RBNZ is scheduled to announce its monetary policy decisions on Wednesday.
After gaining nearly 100 pips in the previous week, the NZD/USD pair continued to push higher on Monday and reached its best level in two weeks at 0.6615 before going into a consolidation phase. As of writing, the pair was moving sideways near the 0.6610 handle, adding 0.35% on a daily basis.
The broad-based greenback weakness that was caused by the FOMC's dovish shift last Wednesday and remained persistent with Friday's data from the U.S. showing slowdown in the business activity in both the manufacturing and service sectors. The US Dollar Index lost 1.4% on a weekly basis last week and is now inching closer to the 96 mark for the first time since mid-March.
The Chicago Fed's National Activity Index and the Dallas Fed's Manufacturing Index from the U.S. will be featured in the economic docket in the second half of the day. FOMC Chairman Powell's speech on Tuesday, however, is likely to be the next significant catalyst.
On the other hand, today's data from New Zealand showed that credit card spending in May increased by 6.6% on a yearly basis to beat the market expectation of 5.4%. In the early trading hours of the Asian session, trade balance data from NZ will be looked upon for fresh impetus. More importantly, the Reserve Bank of New Zealand is scheduled to announce its interest rate decision and publish the policy statement on Wednesday.
Technical levels
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
