NZD: Asia Wrap - NZD/USD Trades Heavy Rallies Should Be Capped For Now
The NZD/USD had a range of 0.5912 - 0.5953 in the Asia-Pac session, going into the London open trading around 0.5925, -0.40%. The USD had a bit of a roller coaster of a ride yesterday as rumours of a potential Powell sacking gained traction, this was later denied by Trump, though he also left the door open to Powell being dismissed for fraud. The price action was very clear though, if Powell is removed the USD will be swiftly sold. NZD/USD has broken below its recent support just under 0.6000 and the price action now suggests we could have a look back towards the important 0.5850 support area. Look for supply now on bounces back towards 0.6000 to cap initially. Any hint of Powell being removed though would clearly see the NZD surge higher once more.
- NEW ZEALAND June Sees Higher Food/Utility Prices, Q2 CPI Out Next Monday
- "NZ Westpac Sees Q2 Inflation Up 0.6%q/q, 2.8% y/y : The local bank weighs in on expectations for next week's Q2 CPI outcome. It expects y/y at 2.8%, which is above RBNZ projections." - BBG
- “ANZ Bank raises Q2 inflation pick to 2.9% from 2.8% previously. “The RBNZ will find the details of the CPI a little more uncomfortable than they hoped back in May.” - BBG
- Options : Closest significant option expiries for NY cut, based on DTCC data: none. Upcoming Close Strikes : 0.5932(NZD317m July 18), 0.6000(NZD300m July 22). - BBG
- CFTC Data shows Asset Managers added slightly to their newly built longs in NZD +9229, the Leveraged community added slightly to their shorts last week -8654
- AUD/NZD range for the session has been 1.0939 - 1.0981, currently trading 1.0950. The cross has moved lower in response to the AU Employment data. Dips back to 1.0850/1.0900 should still find support as the pair tries to build momentum to move higher.
Fig 1: NZD/USD Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
INDONESIA: MNI BI Preview-June 2025: Consecutive Cuts Unlikely
- Download Full Report Here
- Bank Indonesia's (BI) decision is announced on June 18 and it is likely to keep rates at 5.5% after cutting them 25bp in May, although 9 out of 31 analysts on Bloomberg expect another 25bp reduction.
- With the focus remaining on the currency, we believe that BI will be cautious regarding back-to-back easing given that the Fed is widely expected to be on hold this month and it isn’t expected to resume cutting until later this year.
- With the economy slowing and inflation “controlled”, BI is likely to retain its easing bias, be cautious and look for opportunities to ease further going forward depending on global and Fed developments.
FOREX: Asia FX Wrap - The USD Continues To Struggle
The BBDXY has had a range of 1201.63 - 1203.68 in the Asia-Pac session, it is currently trading around 1201.”FX traders will be impressed at the PBOC’s confidence in the yuan, despite all the uncertainty around the Middle East. Meanwhile, US importers are increasingly being asked by their foreign counterparties to settle transactions in currencies other than the US dollar, including renminbi.”(BBG)
- EUR/USD - Asian range 1.1543 - 1.1567, Asia is currently trading 1.1565. EUR has rejected the move above 1.1600 but dips should continue to find demand, first support back towards the 1.1400 area then 1.1100/1200. EUR/USD looked to have broken the pivotal 1.1500 area last week, this needs to be sustained to signal a larger move higher.
- GBP/USD - Asian range 1.3558 - 1.3580, Asia is currently dealing around 1.3575. The GBP continues to hold above its Weekly pivot around 1.3500, it needs a catalyst for the move higher to regain momentum. First support seen back towards 1.3400/50.
- USD/CNH - Asian range 7.1787 - 7.1860, the USD/CNY fix printed 7.1746. Asia is currently dealing around 7.1820. Sellers should be around on bounces while price holds below the 7.2500 area and the PBOC manages the fix lower.
- Cross asset : SPX -0.40%, Gold $3390, US 10-Year 4.436%, BBDXY 1201, Crude oil $72.18
Data/Events : Germany ZEW Survey
Fig 1: USD/CNH Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
NZD: Asia Wrap - Building For A Move Higher
The NZD/USD had a range of 0.6045 - 0.6072 in the Asia-Pac session, going into the London open trading around 0.6070. A relatively quiet session for the NZD, as it continues to build for an extension higher.
- NZ Data - Food & Power Inflation Higher As Petrol & Rents Ease. Monthly price data was mixed in May with food, power, accommodation and alcohol seeing a rise in inflation, while air travel, rents and petrol fell.
- GDP Preview - Q1 GDP Likely To Be Robust Due To Agriculture & Manufacturing. The focus of the week will be on Thursday’s Q1 GDP release. Bloomberg consensus is forecasting another 0.7% q/q increase in production-based GDP, driven by the primary and manufacturing sectors, leaving the annual rate still down 0.8% y/y but up from Q4’s -1.1% y/y. Thus, expenditure-based GDP should see a significant contribution from agricultural and also services (tourism) exports. This is stronger than the RBNZ’s May forecast of a 0.4% q/q rise.
- The USD’s inability to bounce given the geopolitical backdrop is a worrying sign, the NZD will continue to benefit from its malaise.
- The NZD continues to find solid support around the 0.6000 area and has built a decent base from which to push higher from.
- While the support around 0.5850 holds in NZD/USD there should be buyers around on dips. A clear sustained break above 0.6050/0.6100 and the move could start to accelerate forcing some shorts to further reduce positioning.
- CFTC Data showed Asset managers paring back their shorts slightly over the week, the leverage community did likewise.
AUD/NZD range for the session has been 1.0757 - 1.0777, currently trading 1.0760. A top looks in place now just above 1.0900, the cross topped out last week towards the 1.0800/25 sell area, the first target looks to be around 1.0650.
Fig 1: NZD/USD Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
