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NZD/USD struggles to gain near the 0.6360 mark, eye on NZD inflation data

  • NZD/USD struggles to gain ground during the early Asian session on Monday. 
  • Concerns on an economic slowdown in China could be the headwind surrounding the NZD/USD pair. 
  • The US inflation data showed a sign of cooling inflationary pressure.
  • Investors will focus on New Zealand’s Consumer Price Index (CPI) data later in the week.

The NZD/USD pair edges lower around the 0.6360 area in the early Asian session and struggles to capitalize on its uptick to the 0.6400 area on Friday. Markets await the inflation data from New Zealand and the US Retail Sales for June for fresh impetus ahead of the upcoming Federal Open Market Committee (FOMC) meetings.

As expected, the Reserve Bank of New Zealand (RBNZ) kept interest rates unchanged at 5.5%. The last time policymakers left interest rates unchanged was in August 2021.

That said,  Thursday’s Chinese data showed that Trade Balance came in at CNY 491.25 billion in June versus CNY 452.33 billion prior. Also, the Dollar value of China’s exports plunged 12.4% in June, missing the market consensus of a 9.5% decline and a 7.5% drop in May. Meanwhile, imports fell 6.8% versus 4.5% prior. The data fuels concerns on an economic slowdown in the world's second-largest economy, which could be the headwind surrounding the NZD/USD pair, the proxy currency for the Chinese economy.

On the US Dollar front, the University of Michigan's (UoM) Consumer Confidence Index rose to 72.6 from 64.4 in June, above the market consensus of 65.5. Additionally, the Producer Price Index (PPI) released on Thursday showed the figure came in at 0.1%, worse than the expected 0.2%. The core PPI was 2.4%, below the estimation of 2.6%. Meanwhile, June's Consumer Price Index (CPI) increased by 3.0% year on year, falling short of the expected 3.1% increase. Furthermore, the Core CPI, which excludes volatile commodities like food and energy, fell by 0.5% last month, dropping from 5.3% in May to 4.8%. 

The latest US inflation data showed a sign of cooling inflationary pressure. Economists expected the Fed would be less aggressive in tightening monetary policy, and the next interest rate meeting on July 26 could be the last rate hike.

Looking ahead, market participants will focus on New Zealand’s Consumer Price Index (CPI) data on Wednesday, with the annual rate expected to drop from 6.7% to 5.9%. Also, the US Empire State Manufacturing Index and Retail Sales will be released later in the week. Investors will digest these data as the Federal Reserve (Fed) enters its blackout period ahead of the July 25-26 meeting.

NZD/USD

Overview
Today last price0.6364
Today Daily Change-0.0005
Today Daily Change %-0.08
Today daily open0.6369
 
Trends
Daily SMA200.619
Daily SMA500.6175
Daily SMA1000.6193
Daily SMA2000.619
 
Levels
Previous Daily High0.6413
Previous Daily Low0.6364
Previous Weekly High0.6413
Previous Weekly Low0.6166
Previous Monthly High0.625
Previous Monthly Low0.599
Daily Fibonacci 38.2%0.6383
Daily Fibonacci 61.8%0.6394
Daily Pivot Point S10.6351
Daily Pivot Point S20.6333
Daily Pivot Point S30.6302
Daily Pivot Point R10.64
Daily Pivot Point R20.6431
Daily Pivot Point R30.6449

Author

Lallalit Srijandorn

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

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